Modern marketing calls for more than developing a good product, pricing it attractively, and making it accessible

MARKETING POLICY OF COMMUNICATIONS. ADVERTISING IN THE SYSTEM OF PHARMACEUTICAL MARKETING. SALES PROMOTION AND OTHER MEANS OF MARKETING COMMUNICATIONS.

Theoretical questions

1.      Features of promotion medical products according to “push” and “pull” strategies.

2.      Planning of marketing communications.

3.      Formation of demand for goods and services during the marketing activity.

4.      Features of formation of demand for medical products.

5.      The role of trading intermediaries in promotion of goods.

6.      The basic methods of stimulation of selling.

7.      Stimulation of selling of medical products in the system of drugstores. Presentation.

8.      The promotional strategy and the product life-cycle stage.

Modern marketing calls for more than developing a good product, pricing it attractively, and making it accessible. Companies must also communicate with present and potential stakeholders as well as the general public. For most companies, the question is not whether to communicate but rather what to say, to whom, and how often. The marketing communications mix consists of advertising, sales promotion, public relations and publicity, personal selling, and direct marketing, although savvy marketers know that communication goes beyond these five methods. The product’s styling and price, the package’s shape and color, the salesperson’s manner and dress, the place’s decor—all communicate something to buyers. In fact, every brand contact delivers an impression that can affect a customer’s view of the company. Therefore, the entire marketing mix must be integrated to deliver a consistent message and

strategic positioning.

We first explore effective marketing communications and the communications mix, and then look more closely at advertising, sales promotion, and public relations.

DEVELOPING EFFECTIVE MARKETING COMMUNICATIONS

Today there is a new view of communications as an interactive dialogue between the company and its customers that takes place during the preselling, selling, consuming, and postconsuming stages. Successful companies are asking not only “How can we reach our customers?” but, in a break from the past, are also asking “How can our customers reach us?” Now sellers use a variety of communication platforms to stay in touch with customers, as shown in Table 5.1. Increasingly, it is the newer technologies, such as the Internet, that have encouraged more firms to move from mass communication to more targeted communication and one-to-one dialogue with customers and other stakeholders.

There are eight steps to follow in developing an effective marketing communications

program: (1) identify the target audience, (2) determine the communication objectives, (3) design the message, (4) select the communication channels, (5) establish the total communications budget, (6) decide on the communications mix, (7) measure the communications’ results, and (8) manage the integrated marketing communication process.

Step 1: Identifying the Target Audience

The first step is to identify a clear target audience: potential buyers of the company’s

products, current users, deciders, or influencers; individuals, groups, particular publics, or the general public. The target audience is a critical influence on the communicator’s decisions about what to say, how to say it, when to say it, where to say it, and to whom to say it.

Further analysis helps the company assess the audience’s current image of the company, its products, and its competitors. Image is the set of beliefs, ideas, and impressions that a person holds regarding an object. People’s attitudes and actions toward an object such as a product or service are highly conditioned by that object’s

image. In assessing image, marketers research the audience’s familiarity with the product, then they ask respondents who know the product how they feel about it. If most respondents have unfavorable feelings toward the product, the organizatioeeds to overcome a negative image problem, which requires great patience because images persist long after the organization has changed. Once people have a certain image, they perceive what is consistent with that image. It will take highly disconfirming information to raise doubts and open their minds—but it can be done.

Wolverine World Wide of Rockford, Michigan, discovered this when its Hush Puppies brand of casual shoes lost its fashionable image. Then a fashion designer used Hush Puppies dyed in bright colors, changing the product’s image from stodgy to avant garde. Once the “new” Hush Puppies were in demand, sales skyrocketed from less than 30,000 to millions of pairs sold in just 2 years.1

Step 2: Determining the Communication Objectives

Knowing the target audience and its perceptions, the marketing communicator caow decide on the desired audience response, seeking a cognitive, affective, or behavioral response. That is, the marketer might want to put something into the consumer’s mind, change an attitude, or get the consumer to act. The four best-known models of consumer-response stages are presented in Figure 5-5.

Figure 5-5 Response Hierarchy Models

 

All of these models assume that the buyer passes through a cognitive, affective, and behavioral stage, in that order. This “learn-feel-do” sequence is appropriate when the audience has high involvement with a product category that is perceived to have high differentiation, as in purchasing an automobile. An alternative sequence, “do-feellearn,” is relevant when the audience has high involvement but perceives little or no differentiation within the product category, as in purchasing aluminum siding. A third sequence, “learn-do-feel,” is relevant when the audience has low involvement and perceives little differentiation within the product category, as in purchasing salt. By choosing the right sequence, the marketer can do a better job of planning communications.

Step 3: Designing the Message

Having defined the desired response, the communicator moves to developing an

effective message. Ideally, the message should gain attention, hold interest, arouse desire, and elicit action (AIDA model—see the first column of Figure 5-5). In practice, few messages take the target audience all the way from awareness through purchase, but the AIDA framework suggests the desirable qualities of any communication. Formulating the message will require solving four problems: what to say (message content), how to say it logically (message structure), how to say it symbolically (message format), and who should say it (message source).

Message Content

In determining message content, management searches for an appeal, theme, idea, or

unique selling proposition. There are three types of appeals:

➤ Rational appeals engage self-interest by claiming the product will produce certain

benefits such as value or performance. It is widely believed that industrial buyers are

most responsive to rational appeals because they are knowledgeable about the product, trained to recognize value, and accountable to others for their choices. Consumers, when they buy certain big-ticket items, also tend to gather information

and estimate benefits.

Ø    Emotional appeals attempt to stir up negative or positive emotions that will motivate purchase. Marketers search for the right emotional selling proposition. Even when the product is similar to the competitions’ product, it may have unique associations that can be promoted (examples are Harley-Davidson and Rolex). Communicators also work with negative appeals such as fear, guilt, and shame to get people to do things (brush their teeth) or stop doing things (smoking). In addition, positive emotional appeals such as humor, love, pride, and joy are often part of the message content.

➤ Moral appeals are directed to the audience’s sense of what is right and proper. These are often used to exhort people to support social causes. An example is the appeal “Silence Death,” which is the slogan of Act-Up, the AIDS Coalition to Unleash Power.

Multinational companies wrestle with a number of challenges in developing message content for global campaigns. First, they must decide whether the product is appropriate for a country. Second, they must make sure the targeted market segment

is both legal and customary. Third, they must decide if the style of the ad is acceptable or customary in all of the countries. And fourth, they must decide whether ads should be created at headquarters or locally. FedEx, the package express carrier, has chosen to create ads at its U.S. headquarters. Long known for its humorous ads, the company recently created a campaign that ran in 20 countries with only minor changes, instead of being customized or created in each local area. This campaign helped FedEx deliver the message that “we’ve become a global company.”

Message Structure

Message effectiveness depends on structure as well as content. For example, a communicator may think that one-sided presentations that praise a product would be more effective than two-sided arguments that also mention shortcomings. Yet two-sided messages may be more appropriate, especially when some negative association must by overcome. In this spirit, Heinz ran the message “Heinz Ketchup is slow good” and Listerine ran the message “Listerine tastes bad twice a day.”4 Two-sided messages are more effective with more educated audiences and those who are initially opposed.

The order in which arguments are presented is also an important part of message structure. In the case of a one-sided message, presenting the strongest argument first has the advantage of establishing attention and interest. This is important iewspapers and other media where the audience often does not attend to the whole message.

With a captive audience, however, a climactic presentation might be more effective. In the case of a two-sided message, if the audience is initially opposed, the communicator might start with the other side’s argument and conclude with the strongest argument.

Message Format

The communicator must develop a strong message format. In a print ad, the communicator has to decide on headline, copy, illustration, and color. For radio, the communicator has to choose words, voice qualities, and vocalizations. If the message is to by carried on television or in person, all of these elements plus body language (nonverbal clues) have to be planned. If the message is carried by the product or its packaging, the communicator has to pay attention to color, texture, scent, size, and shape. Webbased messages have the flexibility to combine aspects of print, radio, and television messages with a variety of special effects and interactive features to attract, retain, and reinforce audience interest.

Message Source

Messages delivered by attractive or popular sources achieve higher attention and recall, which is why advertisers often use celebrities as spokespeople. In particular, messages delivered by highly credible sources are more persuasive, so pharmaceutical companies have doctors testify about product benefits because doctors have high credibility.

Three factors that underly source credibility are expertise, trustworthiness, and likability. Expertise is the specialized knowledge the communicator possesses to back

the claim. Trustworthiness is related to how objective and honest the source is perceived to be. Friends are trusted more than strangers or salespeople, and people who are not paid to endorse a product are seen as more trustworthy than people who are paid.

Likability describes the source’s attractiveness; qualities like candor, humor, and naturalness make a source more likable. The most credible source would score high on all three factors.

Step 4: Selecting Communication Channels

Now that the message has been designed, the communicator must select efficient communication channels to carry it. For example, pharmaceutical salespeople can rarely wrest more than 10 minutes’ time from a busy physician. Because personal selling is expensive, the industry has added multiple channels: ads in medical journals, direct mail (including audio and videotapes), sampling, telemarketing, Web sites, conferences and teleconferences, and more. All of these channels are used in the hope of building physician preference for particular branded drug products. In general, firms can use two types of communication channels: personal and nonpersonal.

Personal Communication Channels

Personal communication channels involve two or more persons communicating directly with each other face to face, person to audience, over the telephone, or through e-mail. These channels derive their effectiveness through the opportunities for individualizing the presentation and feedback. Amazon.com, for example, invites on-line customers to sign up for e-mailed reviews and recommendations from experts

in their choice of book, music, toy, and home improvement subjects. Companies can take several steps to stimulate personal influence channels to work on their behalf:

➤ Identify influential individuals and companies and devote extra effort to them: In industrial selling, the entire industry might follow the market leader in adopting

innovations.

➤ Create opinion leaders by supplying certain people with the product on attractive terms: A new tennis racket might be offered initially to members of high school tennis teams at a special low price.

➤ Work through community influentials such as local disk jockeys and heads of civic organizations: When Ford introduced the Thunderbird, it sent invitations to executives offering a free car to drive for the day; 10 percent of the respondents indicated that they would become buyers, and 84 percent said they would

recommend the car to a friend.

➤ Use influential or believable people in testimonial advertising: This is why sports

equipment and apparel companies hire top athletes such as Tiger Woods as spokespeople.

Develop advertising that has high “conversation value”: Ads with high conversation value often have a slogan that becomes part of the national vernacular, such as Nike’s

“Just do it.”

➤ Develop word-of-mouth referral channels to build business: Professionals such as

accountants will often encourage clients to recommend their services.

➤ Establish an electronic forum: Toyota owners who use Internet services such as America Online can hold on-line discussions to share experiences.

Nonpersonal Communication Channels

Nonpersonal channels include media, atmospheres, and events. Media consist of print

media (newspapers, magazines, direct mail), broadcast media (radio, television), electronic media (audiotape, videotape, CD-ROM, DVD, Web page), and display media (billboards, signs, posters). Most nonpersonal messages come through paid media.

Atmospheres are “packaged environments” that create or reinforce the buyer’s leanings toward product purchase. Law offices are decorated with fine rugs and furniture to communicate “stability” and “success;” site is colorful and animated to reinforce the brand’s upbeat image.

Events are occurrences designed to communicate particular messages to target audiences. Tokyo’s Mitsukoshi Department Store, for example, arranges special cultural events and arts exhibits in the flagship store to maintain a sophisticated, cultured image in the minds of upscale shoppers.

Although personal communication is often more effective, nonpersonal channels affect personal attitudes and behavior through a two-step flow-of-communication process. Ideas often flow from radio, television, print, and Internet sources to opinion leaders and from these to the less media-involved population groups. This two-step flow has several implications. First, the influence of nonpersonal channels on public opintheir opinions to others. Second, the two-step flow shows that people interact primarily within their own social group and acquire ideas from opinion leaders in their group. Third, two-step communication suggests that marketers using nonpersonal channels should direct messages specifically to opinion leaders and let them carry the message to others. This is why many software makers give opinion leaders a preview of new programs before they are sold to the general public.

Step 5: Establishing the Marketing Communications Budget

Industries and companies vary considerably in how much they spend on promotion; expenditures might amount to 30–50 percent of sales in the cosmetics industry but only 5–10 percent in the industrial-equipment industry, with variations from company to company. How do companies decide on the promotion budget? Here are four common methods:

Affordable method. Many companies set the promotion budget at what management thinks the firm can afford. However, this method ignores the role of promotion as an investment and the immediate impact of promotion on sales volume; it also leads to an uncertain annual budget, making long-range planning difficult.

➤ Percentage-of-sales method. Many firms set promotion expenditures at a specified percentage of sales (either current or anticipated) or of the sales price. Supporters say this method links promotion expenditures to the movement of corporate sales over the business cycle; encourages management to consider the interrelationship of promotion cost, selling price, and unit profit; and encourages stability when competing firms spend approximately the same percentage. On the other hand, this method views sales as the determiner of promotion rather than as the result, and it provides no logical basis for choosing the specific percentage.

➤ Competitive-parity method. Some companies set their promotion budget to achieve share-of-voice parity with competitors. Although proponents say that competitors’expenditures represent the collective wisdom of the industry and that maintaining competitive parity prevents promotion wars, neither argument is valid. There are no grounds for believing that competitors know better what should be spent on promotion. Company reputations, resources, opportunities, and objectives differ so much that promotion budgets are hardly a guide. Furthermore, there is no evidence that competitive parity discourages promotional wars.

Objective-and-task method. Here, marketers develop promotion budgets by defining specific objectives, determining the tasks that must be performed to achieve these objectives, and estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget. This method has the advantage of requiring management to spell out assumptions about the relationship among dollars spent, exposure levels, trial rates, and regular usage.

Step 6: Developing and Managing the Marketing

Communications Mix. Having established a communications budget, companies must decide how to allocate it over the five promotional tools. Companies differ considerably in their allocations, even within the same industry. Avon concentrates its promotional funds on personal selling, whereas Cover Girl spends heavily on advertising. Still, because companies are always searching for more efficiency by substituting one promotional tool for another, they must be careful to coordinate all of their marketing functions.

Promotional Tools

Each promotional tool has its own unique characteristics and costs.

➤ Advertising. Advertising can be used to build up a long-term image for a product (Coca-Cola ads) or trigger quick sales (a Sears ad for a weekend sale). Advertising can reach geographically dispersed buyers efficiently. Certain forms of advertising (TV advertising) typically require a large budget, whereas other forms (newspaper advertising) can be done on a small budget. We discuss advertising in more detail later in this chapter.

➤ Sales promotion. Although sales-promotion tools—coupons, contests, premiums, and the like—are highly diverse, they offer three distinctive benefits: (1) communication (they gain attention and usually provide information that may lead the consumer to the product); (2) incentive (they incorporate some concession or inducement that gives value to the consumer); and (3) invitation (they include a distinct invitation to engage in the transactioow). Sales promotion can be used for short-run effects such as dramatizing product offers and boosting sales. Later in this chapter we discuss sales promotion in more detail.

➤ Public relations and publicity. The appeal of public relations and publicity is based on three distinctive qualities: (1) high credibility (news stories and features are more authentic and credible than ads); (2) ability to catch buyers off guard (reach prospects who prefer to avoid salespeople and advertisements); and (3) dramatization (the potential for dramatizing a company or product). This underused technique is examined later in this chapter.

Personal selling. Personal selling has three distinctive qualities: (1) personal confrontation (it involves an immediate and interactive relationship between two or more persons); (2) cultivation (it permits all kinds of relationships to spring up, ranging from a matter-of-fact selling relationship to a deep personal friendship); and (3) response (it makes the buyer feel under some obligation for having listened to the sales talk).

➤ Direct marketing. All forms of direct marketing—direct mail, telemarketing, Internet marketing—share four distinctive characteristics: They are (1) nonpublic (the message is normally addressed to a specific person); (2) customized (the message can be prepared to appeal to the addressed individual); (3) up-to-date (a message can by prepared very quickly); and (4) interactive (the message can be changed depending on the person’s response).

Companies must consider several factors in developing their promotion mix:

➤ Type of product market. As Figure 5-6 shows, promotional allocations vary between consumer and business markets. Although advertising is used less than sales calls in business markets, it still plays a significant role in building awareness and comprehension, serving as an efficient reminder of the product, generating leads, legitimizing the company and products, and reassuring customers about their purchases. Personal selling can also make a strong contribution in consumer-goods marketing by helping to persuade dealers to take more stock and display more of the product, build dealer enthusiasm, sign up more dealers, and grow sales at existing accounts.

➤ Push-versus-pull strategy. A push strategy involves the manufacturer using sales force and trade promotion to induce intermediaries to carry, promote, and sell the product to end users. This is especially appropriate where there is low brand loyalty in a category; brand choice is made in the store; the product is an impulse item; and product benefits are well understood. A pull strategy involves the manufacturer using advertising and consumer promotion to induce consumers to ask intermediaries for the product, thus inducing the intermediaries to order it. This is especially appropriate when there is high brand loyalty and high involvement in the category; people perceive differences between brands; and people choose the brand before they go to the store.

Relative Spending on Promotional Tools in Consumer versus Business Markets

Buyer-readiness stage. Promotional tools vary in cost effectiveness at different stages of buyer readiness, as shown in Figure 5-7. Advertising and publicity play the most important roles in the awareness-building stage. Customer comprehension is affected primarily by advertising and personal selling, while customer conviction is influenced mostly by personal selling. Closing the sale is influenced mostly by personal selling and sales promotion. Reordering is also affected mostly by personal selling and sales promotion, and somewhat by reminder advertising.

➤ Product-life cycle stage. Promotional tools also vary in cost effectiveness at different stages of the product life cycle. Advertising and publicity are most cost effective in the introduction stage; then all the tools can be toned down in the growth stage because demand is building word of mouth. Sales promotion, advertising, and personal selling grow more important in the maturity stage. In the decline stage, sales promotion continues strong, advertising and publicity are reduced, and salespeople give the product only minimal attention.

➤ Company market rank. Market leaders derive more benefit from advertising than from sales promotion. Conversely, smaller competitors gain more by using sales promotion in their marketing communications mix.

Step 7: Measuring Results

After implementing the promotional plan, the communicator must measure its impact. Members of the target audience are asked whether they recognize or recall the message, how many times they saw it, what points they recall, how they felt about the message, and their previous and current attitudes toward the product and company. The communicator should also collect behavioral measures of audience response, such as how many people bought the product, liked it, and talked to others about it.

Suppose that 80 percent of the targeted customers are aware of the brand, 60 percent have tried it, and only 20 percent who have tried it are satisfied. This indicates that the communications program is effective in creating awareness, but the product fails to meet consumer expectations. However, if 40 percent of the targeted customers are aware of the brand and only 30 percent have tried it—but 80 percent of those who have tried it are satisfied—the communications program needs to be strengthened to take advantage of the brand’s power.

 

Cost Effectiveness of Different Promotional Tools at Different

Buyer-Readiness Stages

Step 8: Managing the Integrated Marketing Communications Process

Given the fragmenting of mass markets into minimarkets, the proliferation of new

types of media, and the growing sophistication of consumers, companies need to use a wider range of communication tools, messages, and audiences. To do this most effectively, companies must embrace integrated marketing communications. As defined by the American Association of Advertising Agencies, integrated marketing communications (IMC) is a concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communications disciplines—for example, general advertising, direct response, sales promotion and public relations—and combines these disciplines to provide clarity, consistency, and maximum communications’ impact through the seamless integration of discrete messages.

Warner-Lambert, maker of Benadryl, has creatively used IMC to promote its antihistamine drug. The company used advertising and public relations to increase brand awareness among allergy sufferers and to promote a toll-free number that more than once received free product samples, coupons, and materials describing the product’s benefits. These people also received a newsletter with advice about coping with allergies.

Savvy firms know that IMC produces stronger message consistency and greater sales impact; it also gives someone responsibility to unify the company’s various brand images and messages. Properly implemented, IMC will improve the company’s ability to reach the right customers with the right messages at the right time and in the right place.

DEVELOPING AND MANAGING THE ADVERTISING CAMPAIGN

Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.15 Advertisers include not only business firms but also museums, charitable organizations, and government agencies that direct messages to target publics. Ads are a cost-effective way to disseminate messages, whether to build brand preference for Intel computer chips or to educate people about the dangers of drugs.

In developing an advertising program, successful firms start by identifying the target market and buyer motives. Then they can make five critical decisions, known as the five Ms: Mission: What are the advertising objectives? Money: How much can be spent? Message: What message should be sent? Media: What media should be used? Measurement: How should the results be evaluated?

Setting the Advertising Objectives

Advertising objectives can be classified according to whether their aim is to inform, persuade, or remind.

➤ Informative advertising figures heavily in the pioneering stage of a product category, where the objective is to build primary demand. Thus, DVD makers initially had to inform consumers of the benefits of this technology.

➤ Persuasive advertising becomes important in the competitive stage, where the objective is to build selective demand for a particular brand. For example, Chivas Regal attempts to persuade consumers that it delivers more taste and status than other brands of Scotch whiskey. Some persuasive advertising is comparative advertising, which explicitly compares two or more brands.

➤ Reminder advertising is important with mature products. Coca-Cola ads are primarily intended to remind people to purchase Coca-Cola. A related form of advertising is reinforcement advertising, which seeks to assure current purchasers that they have made the right choice. Automobile ads often depict satisfied customers enjoying special features of their new car.

The advertising objective should emerge from a thorough analysis of the current marketing situation. If the product class is mature, the company is the market leader, and brand usage is low, the proper objective should be to stimulate more usage. If the product class is new, the company is not the market leader, but the brand is superior to the leader, then the proper objective is to convince the market of the brand’s superiority.

Deciding on the Advertising Budget

Management should consider these five factors when setting the advertising budget:

1. Product life cycle stage: New products typically receive large budgets to build awareness and to gain consumer trial. Established brands usually are supported with lower budgets as a ratio to sales.

2. Market share and consumer base: High-market-share brands usually require less advertising expenditure as a percentage of sales to maintain their share. To build share by increasing market size requires larger advertising expenditures. On a cost-per-impression basis, it is less expensive to reach consumers of a widely used brand than to reach consumers of low-share brands.

3. Competition and clutter: In a market with a large number of competitors and high advertising spending, a brand must advertise more heavily to be heard. Even simple clutter from advertisements that are not directly competitive to the brand creates a need for heavier advertising.

4. Advertising frequency: The number of repetitions needed to put across the brand’s message to consumers has an important impact on the advertising budget.

5. Product substitutability: Brands in a commodity class (cigarettes, beer, soft drinks) require heavy advertising to establish a differential image. Advertising is also important when a brand offers unique benefits or features.

Newspapers

Flexibility; timeliness; good local market coverage; broad acceptance; high believability Short life; poor reproduction quality; small “pass-along” audience

Television

Combines sight, sound, and motion; appealing to the senses; high attention; high reach     High absolute cost; high clutter; fleeting exposure; less audience selectivity

Direct mail

Audience selectivity; flexibility; no ad competition within the same medium; personalization; Relatively high cost; “junk mail”image

Radio

Mass use; high geographic and demographic selectivity; low cost; Audio presentation only; lower attention than television; nonstandardized rate structures; fleeting exposure

Magazines

High geographic and demographic selectivity; credibility and prestige; high-quality reproduction; long life; good pass-along readership; Long ad purchase lead time; some waste circulation; no guarantee of position

Outdoor

Flexibility; high repeat exposure; low cost; low competition;Limited audience selectivity; creative limitations

Yellow Pages

Excellent local coverage; high believability; wide reach; low cost; High competition; long ad purchase lead time; creative limitations

Newsletters

Very high selectivity; full control; interactive opportunities; relative low costs; Costs could run away

Brochures

Flexibility; full control; can dramatize messages; Overproduction could lead to runaway costs

Telephone

Many users; opportunity to give a personal touch;     Relative high cost unless volunteers are used

Internet

High selectivity; interactive possibilities; relatively low cost; Relatively new media with a low number of users in some countries

PUBLIC RELATIONS STRATEGIES

Not only must the company relate constructively to customers, suppliers, and dealers, but it must also relate to a large number of interested publics. A public is any group that has an actual or potential interest in or impact on a company’s ability to achieve its objectives. Public relations (PR) involves a variety of programs that are designed to promote or protect a company’s image or its individual products.

The wise company takes concrete steps to manage successful relations with its key publics. PR departments typically perform five functions: (1) press relations (presenting news and information about the organization in the most positive light); (2) product publicity (publicizing specific products); (3) corporate communication (promoting understanding of the organization through internal and external communication). (4) lobbying (dealing with legislators and government officials to promote or defeat legislation and regulation); and (5) counseling (advising management about public issues and company positions and image—and advising in the event of a mishap).

 

Price-Off (off-invoice or off-list): A straight discount off the list price on each case purchased during a stated time period.The offer encourages dealers to buy a quantity or carry a new item that they might not ordinarily buy.The dealers can use the buying allowance for immediate profit, advertising, or price reductions.

Allowance: An amount offered in return for the retailer’s agreeing to feature the manufacturer’s products in some way.An advertising allowance compensates retailers for advertising the manufacturer’s product.A display allowance compensates them for carrying a special product display.

Free Goods: Offers of extra cases of merchandise to intermediaries who buy a certain quantity or who feature a certain flavor or size. Manufacturers might offer push money or free specialty advertising items to retailers that carry the company’s name.

Trade Shows and Conventions: Industry associations organize annual trade shows and conventions where firms selling products and services to this industry buy space and set up booths and displays to demonstrate their products. Participating vendors expect several benefits, including generating new sales leads, maintaining customer contacts, introducing new products, meeting new customers, selling more to present customers, and educating customers with publications, videos, and other audiovisual materials.

Sales Contests: A sales contest aims at inducing the sales force or dealers to increase sales over a stated period, with prizes going to those who succeed. Incentives work best when they are tied to measurable and achievable sales objectives (such as finding new accounts or reviving old accounts) for which employees feel they have an equal chance.

Specialty Advertising: Specialty advertising consists of useful, low-cost items (such as calendars) bearing the company’s name and address, and sometimes an advertising message, that salespeople give to prospects and customers.

Marketing Public Relations

Many companies are turning to marketing public relations (MPR) to directly support corporate or product promotion and image making. Thus MPR, like financial PR and community PR, serves a special constituency, namely the marketing department.

MPR plays an important role in:

➤ Assisting in the launch of new products: The amazing success of toys such as the Pokemon line owes a great deal to clever publicity.

➤ Assisting in repositioning a mature product: New York City had extremely bad press in the 1970s until the “I Love New York” campaign began.

➤ Building interest in a product category: Companies and trade associations use MPR to rebuild declining interest in commodities such as eggs and expand consumption of products such as pork.

➤ Influencing specific target groups: McDonald’s sponsors special neighborhood events in Latino and African American communities to build goodwill.

➤ Defending products that have encountered public problems: Johnson & Johnson’s masterly use of MPR was a major factor in saving Tylenol from extinction following two incidents in which poison-tainted Tylenol capsules were found.

➤ Building the corporate image in a way that reflects favorably on its products: Richard Branson’s outrageous publicity stunts have created a bold, upstart image for his U.K.-based Virgin Group.

As the power of mass advertising weakens, marketing managers are turning to MPR to cost-effectively build awareness and brand knowledge and to reach local communities and specific audiences. The company does not pay for the space or time obtained in the media; it pays only for a staff to develop and circulate the stories and manage certain events. A story picked up by the news media could be worth millions of dollars in equivalent advertising—and would be more credible than advertising.

THE CHARACTERISTIC OF ADVERTISING, ITS ROLE IN A PROMOTION-MIX

Advertising consists of all the activities involved in presenting to a group a nonpersonal, oral or visual, openly sponsor-identified message regarding a product, service, or idea. This message, called an advertisement, is dissemi¬nated through one or more media and is paid for by the identified sponsor.

There is a significant distinction between advertising and an advertise¬ment. The advertisement is the message itself. Advertising is a process—it is a series of activities necessary to prepare the message and get it to the intended market. Another point is that the public knows who is behind the advertising because the sponsor is openly identified in the advertisement. Besides, payment is made by the sponsor to the media that carry the message. These last two con¬siderations differentiate advertising from propaganda and publicity.

Fundamentally, the only purpose of advertising is to sell something — a product, a service, or an idea. Stated another way, the real goal of advertising is effective communication. That is, the ultimate effect of advertising should be to modify the attitudes and/or behavior of the receiver of the message. This broad goal of advertising is better reached by setting specific objectives that can be incorporated into individual advertising campaigns. Of course, specific advertising objectives will be determined by the company’s overall marketing strategies — especially the strategies related to the firm’s promotional program. A few examples of specific goals are as follows:

>       Support personal selling. Advertisement may be used to open customers’ doors for sales people, and to acquaint prospects with the sellers’ company.

>       Reach people inaccessible to the sales force. Sales people may be unable to reach top executives, or they may not be certain who makes the buying decisions in a company. In either case, there is a good chance that these executives will read a journal that carries the ads.

>       Improve dealer relations.

>       Enter a new geographic market or attract a new group of customers. y Introduce a new product.

>       Increase sales of a product. An advertising campaign may be designed to lengthen

>       the season for the product; increase the frequency of replacement; increase the variety of product uses; or increase the units of purchase.

Expand the industry’s sales. y Counteract prejudice or substitution.

>       Build goodwill for the company and improve its reputation (a) by rendering a public service through advertising or (b) by telling of the organization behind the product.

Thus, advertising acts in 4 roles:

•        Marketing.

•        Communication.

•        Economic.

•        Social.

The marketing role of advertising consists in influence on the target market through each element of marketing (4P) as includes the mechanism of transfer to the buyer of the information, in turn advertising – a component of marketing communications.

The communication role – advertising is one of forms of mass communication. It transfers various types of the marketing information directed on achievement of understanding between sellers and buyers in the market.

The economic role – there are 2 systems of the views concerning the influence of advertising on economy: the first – advertising is the communication tool of belief used by experts of the market for derivation of attention of buyers from the price; the second – sees advertising as a source of the information, which raises sensitivity of buyers the price and stimulates a competition. The social role:

>       advertising informs oew and improved production;

>       promotes comparison of the goods, enabling the buyer to make a decision on purchase;

>       development of advertising serves in the certain degree as a parameter of development of a society;

>       advertising affects people (sometimes overwhelming).

The classification of advertising

By objects:

•        for buyers of consumer goods;

•        for professionals.

By the subject:

•        own goods;

•        the trade mark;

•        firms of a producer (manufacturer);

•        trade enterprise.

By the basic ways (channels) of distribution:

•        printed;

•        film advertising;

•        radio advertising;

•        television advertising;

, external advertising; . in a place of sale; . souvenir advertising.

By the width of the commodity scope: . primary (advertises the goods in general); . selective (advertises the certain kind of the goods); . indirect advertising.

By the stages of the life cycle: . information (the new goods); . supporting (at the maturity stage); . aggressive (at the stage of saturation of the market). Requirements to advertising

In a basis of advertising there should be a creative concept; Advertising should be strategic, actual, original, concerning new. The corresponding decision of advertising should be picked up. The idea of advertising should affect. The basic components of the advertising process are:

1.      Advertizers (customers).

2.      Advertising agencies.

3.      Means of advertising (an advertising package).

4.      Consumers (an advertising audience) of goods and services.

Stages of planning of advertising campaigns The choice of an object of advertising (a medical product, firm). Determination and studying of target audience (or the target market). The statement of purposes (motive) of advertising. Determination of the advertising budget.

Development of the plan of using the means of advertising. Creation of the advertising message. Development of the schedule of advertising performances. ” Planning of efficiency of advertising.

Methods of planning of the advertising budget * Planning of % from the volume of sale of goods;

•        On a level of expenses of competitors on advertising;

•        By the residual principle;

. On the basis of calculations of expenses for each kind of advertising;

•        Scientific methods: econometric, experimental, testing, an expert estimation.

The economic efficiency of an advertising campaign

>       By the increase in the volume of selling

>       A method of expert estimations.

>       Century with use of factors of recalculation

>       The estimation of the TV advertising efficiency by the rating of the program

 

PUBLIC RELATIONS

Public relations is an organization’s broad, overall communications effort intended to influence various groups’ attitudes toward that organization. Public relations activities typically are designed to build or maintain a favorable image for an organization and a favorable relationship with the organization’s various “publics.” These publics may be customers, stockholders, employees, unions, environmentalists, the government, people in the local community, or some other group in society.

Directions PR or fields of the PR activity

>       Contacts to other divisions of the enterprise.

>       Consultation of administration.

>       Relations with the local organizations.

>       Preparation of conferences and performances.

>       Studying the public opinion.

>       Relations with shareholders.

>       Business relations with educational institutions.

>       Different public actions.

>       Relations with the financial organizations.

>       Relations with clients.

>       Business correspondence.

>       Lobbying interests of the company.

>       Work in the domestic and international organizations on public relations.

 

MERCHANDIZING IN THE PHARMACY ENTERPRISES

One of the effective means of advertising and attraction of attention of buyers is merchandizing. Merchandizing is marketing in the retail point consist¬ing of technical equipment on accommodation of the goods, development and an arrangement of promotional materials on a place of purchase.

The interior of a drugstore should have corresponding style, a lay-out, a direction of a stream of visitors, smells, sounds. Execution of a trading hall and show-windows provides observance principles – then more demand that should be visible more. The arrangement of the goods at a level of eyes is effective, for lhese purpose arrows; inscriptions near the goods, which promote its sales are used. It is recommended not to expose the goods symmetrically and precisely. Promotional materials should be spread near to turn or a congestion of visitors. The goods exposed on show-windows are sold at 6-12 time more often, than on shelves. Accommodation of the goods from left to right – the goods in the big¬gest packing – on the right.

The share of the goods in the market is a share of the goods on a shelf. Demand should be determined in money terms, instead of in quantitative ones. A buyer should find easily the goods in the certain place. It is necessary to react quickly to advertising campaigns and to do the re¬spective alterations in the calculation.

Employees of a drugstore should define, which promoted materials to spread, on which ones to emphasize depending the category of a drugstore, a structure, from the social status of buyers. There are three laws of merchandizing:

>       The law of a stock: all laid out goods are provided at least with a 3-day’s stock;

>       Arrangements are assumed with the obligatory presence of the minimal set of positions certain for each shop.

>       Presentations: one name of the goods is submitted in several units (3 times). For example, 2 variants of packing increase commodity circulation by 15 %, 3 variants – by 30 %, 4 variants by 60%, 5 variants more than by 100 %.

The priority point is near to the pharmacist, it is a little more to the right at the height 120-170cm. It should take 20-25 min to the customer to orient in the trading hall. Inscriptions “Vitamins”, «Remedies for cold and cough» are used for it.

There are some rules of a drug demonstration:

>       A rule of balance: for fast and easy orientation of the buyer the goods of one commodity group should be settled down horizontal line, symmetrically to each other.

>       A rule of price lists: the price for the exposed goods is necessary.

>       A rule of “walls of the lock”: the most popular production of one company is located as walls of the lock on edges;

 A rule of the corporate bloc;

 A rule of duplication: leading positions should occupy the area 2 times larger

than other groups; y A rule of the order – the certain order of brands should be observed; y A rule of a priority place: the most sold production and profitable one take priority place.

 

Pharmacy merchandising implies merchandising consisting of the combination of techniques related to products layout as well as advertising materials development and their location at the point of purchase.

The main task of merchandising implies the right demonstration and location of products and medicines on the pharmacy shelves for the purpose of increasing volumes of sale.

The additional tasks of merchandising are:

Ø     improving the manufacturing company image

Ø     simplifying the purchase process

Ø     providing convenience for customers

Ø     preservation of old customers and attraction of new ones

Ø     increasing volumes of sales.

 

At the first sight, one can think that merchandising can bring profit only to a manufacturing company as it helps it to sell its products faster and to enhance its image at the market. But it’s not right. Merchandising is also effective for pharmacies as well as for customers. Pharmacy merchandising promotes faster sale of products, improves the quality of customer service, which contributes to the improvement of the pharmacy image. The thought-out merchandising in respect of customers provides a possibility of quickly choosing a product by performing the first purchase, easily finding your way by buying a certain product (brand) as well as getting acquainted with new goods.

Merchandising starts by front side and shop-window decoration. By making a decision about front side and shop-window decoration, one should remember that customers tend to stick to the right side of a pedestrian path or a sidewalk. So it’s necessary to determine what side is regarded as right by pedestrians. In order to do it, one should analyze prevailing streams of customers, location of public transport stops, parking lots, large trading and cultural centres, offices and enterprises.

Depending on personal peculiarities and mood, customers’ look as well as attention can be explorative, roving, abstract. To fix a potential customer’s eyesight, one should make a decision about locating daylights and models at the front side or in the shop-window attracting the attention and inducing one to visit a drug-store or a pharmacy.

Advertising sign. Sokol pharmacy

The importance of over-the-counter medicines is determined by the following:

self-treatment development an end-customer has a possibility of choosing from a wide range of products a great number of over-the-counter medicines provided for reasonable prices spontaneous purchase directly in point of sales and pharmacies

 There can be three types of purchase:

closed planned (determined) – a customer knows beforehand what he/she is going to by open planned (non-determined) – a customer knows what type of products he/she needs but hasn’t decided about a brand yet spontaneous purchase – a customer does not plan to make a purchase.

 

According to the research results, 60% of customers make a decision about a purchase in the point of sale and only 25-33% of customers use a list of products they want to buy. Information and product demonstration in the store often provides a decisive impact on a decision about a purchase.

The pharmacy owner pays a lot of attention to the fact that a potential customer’s subconscious desire to buy a product should transform into a decision about a purchase as soon as possible. The matter is that it’s scientifically proved that the desire to buy something is located within human subconsciousness, so advertising of products tends to make a customer fulfill this desire creating a certain image of a product and a medicine. Physical characteristics, quality and usefulness of a product are in a latent state within customers’ subconsciousness. In this case almost everything depends on the right layout of products in the pharmacy so that a potential customer could easily “find” them.

 By planning merchandising measures, it’s necessary to remember about some peculiarities of customers’ behavior in the point of sale:

95% of customers entering a point of sale stop after passing 1/3 of the shop

90% of customers want to find all products they want to buy without passing large distances and coming back most customers (right-handers) prefer going straight without turning to the right or left but nevertheless tend to look at and take products located on the right (Fig.1)

 

 

 

most customers turn to the left, counterclockwise, while passing through the store

customers avoid noisy, dark, dirty and poorly lit places (Fig.2)

 

Fig.2

Places of products location in the store can be divided into two main categories: strong and weak points (Fig.3).

 

 

Strong points:

5, 3 – shelves to the right side along the customers’ traffic movement

11 – shelves rows crossing points

1, 4 – places with good front view

10 – space next to the cash operating unit

9 – gondolas end parts

 Weak points:

2, 6 – shelves to the left side along the customers’ traffic movement

7 – corners

8 – places next to the store entrance

 

The route customers stick to while going through the pharmacy can and shall be corrected so as all parts of the store should be visited on a high frequency level. It’s achieved by means of the so-called “loss leaders” (those that are most frequently searched for by customers).

Tasks of products display on the shelves:

–         to induce a customer who has already bought this medicine before to make a repeated purchase in case of the first purchase,

–          to make a customer acquire a trade mark of the company to induce a customer to replace a competitive trade mark with a trade mark of the company in case of spontaneous purchase,

–         to make a customer decide for a trade mark of the company in case of planned purchase,

–         to provide an opportunity of easily finding the very trade mark a customer is looking for Judging by the experience, in winter, when the light day is shortened, specially developed information daylights (cases) make a pleasant impression and attract the attention of potential customers.

It’s common knowledge that within a pharmacy a customer moves by the average speed of 1m/sec, while the human eye is capable of seeing an object image if it’s located in field of vision for at least 1-3 seconds. Besides, best of all a customer can see a product located at the eye level (120-160 cm from the floor). Taking into consideration these data, the place on the shelve meant for a certain medicine should be over 33 cm, only in this case it’ll be noticed by a customer. It’s a basis for the principle of shop-windows decoration: medicines by therapeutic groups in the format of displays should be located at the distance of at least 33 cm. Such a display located in shop-windows takes little space and contains brief information related to each medicine.

At cash-operating units where a customer spends enough time paying for his/her purchase, one can install plates for coins displaying some information about medicines.

After determining a place of products location, one should define their right layout on the shelves. It should consider the main stereotypes of customers’ behavior, who as it’s know tend to first of all look at and take a product located to the right, which means that this product has more chances to be seen and bought. A great deal of customers’ attention is paid to the central group of products on the shelf.

         Taking into consideration customers’ behavior, one can determine the following parts on the shelves: strong horizontal parts: in the middle of the shelf and in the middle of a products group, next to the right side weak horizontal parts: to the left of the middle of the shelf or side sections of a products group strong vertical parts: at the eye and breast level weak vertical parts: at the waste level and lower, over the head level (in order to take a product, a customer has either to bend or to reach the place of a product location).

Products that can be easily seen and taken from the shelf are the most attractive for the customer.

 Methods of products display on the shelves

 Gondola is a stand-alone counter with shelves. The gondola contains strong and weak parts. Strong parts include those parts located from the waste to the eye level where a product is easily and conveniently viewed and perceived by a customer.

Gondola end is a front gondola part, the most efficient and perfect place for new products and offers due to their standing out amidst the general background.

Products facing is an amount of product packages on horizontal shelves (only front rows are implied, back and vertical rows are not considered). The decisive factor for the amount of facings in the pharmacy depends on the volume of products sale and measures related to their promotion performed by a manufacturer. The final decision related to products facing is made by a retail seller.

Traditional places of products facing include places next to competitive products of the same category. Besides, by products facing, it‘s important to consider a trade mark popularity as well as a manufacturer’s advertising support. The famous and well advertised trade marks of medicines should be located in the most efficient places on the store shelves. The location of competitive products with less advertising support and popularity next to the famous and well advertised ones increases the volume of sales of a competitive product.

 Additional places of products facing

 Additional places of products facing are not strictly determined but used for special offers or types of products promotion.

Vertical location of a product is one of the preferable options of a product location providing the highest degree of probability that this trade mark will be noticed by a customer.

Horizontal location of a product is mostly effective in case of location at the eye level and can include a vertical element in the form of locating a product on two-three shelves.

Advertising point of sale materials include materials located next to a product in traditional or additional places of products facing. The examples include posters, flags, strips for attracting attention, information stands, etc.

         Pharmacy merchandising provides a considerable economic effect. The simple location of a product from the waste to the breast level increases the volume of sale by 34%, while the location from the waste to the eye level – by 78%. The location of a product from the breast to the eye level allows to step up the volume of products sale by 63%. Pharmacy shelves enjoy different degrees of customers’ attention but products located at the eye or breast level have much more chances to be purchased.

 

FEATURES OF PROMOTION MEDICAL PRODUCTS ACCORDING TO “PUSH” AND “PULL” STRATEGIES

Product planning, pricing, and distribution are marketing activities that are performed mainly within the company, or between the company; and its marketing “partners.” Promotion is the element in an organization’s marketing mix that is used to inform and persuade the market regarding the organization’s products and services. Many people consider selling and marketing to be synonymous terms when, actually, selling is only one of the many components of marketing. We will treat selling and promotion as synonymous terms, although promotion is preferred. For many people, selling suggests only the transfer of title or only the activities of sales people and does not include advertising or other methods of stimulating demand. In our definition, promotion includes advertising, personal selling and all other selling tools. Together, they are basic factors in the marketing mix.

The two most widely used methods of promotion are personal selling and advertising. Other forms of promotion are:

>       Sales promotion, which is designed to supplement and coordinate personal selling and advertising efforts. Sales promotion includes such activities as setting up store displays, holding trade shows, and distributing samples, premi¬ums, or “cents-off’ coupons.

>       Publicity, which is a non-personal form of the demand stimulation and is not paid for by the person or the organization benefiting from it. Typically publicity takes the form of a favorable news presentation (a “plug”) for a prod¬uct, service or organization. The plug is made in print, on radio or television, or in some form of public address. Typically publicity is part of a firm’s public relations effort.

>       Public relations, which is a planned effort by an organization to influence some group’s attitude or opinion toward that organization. The target market of the public relations effort may be any given “public”, such as customers, a government agency, or people living near the promoting organization. The firm’s public relations department is responsible for a product or for the entire organization.

Manufacturers may aim their promotion either at middlemen or at end users to help to move their products through the channels. Promotion aimed at middlemen is called a “push” strategy, and promotion aimed at end users is referred to as a “pull” strategy.

Using a “push” strategy means that the manufacturer will direct its promotion only at the middlemen, who are the next link forward in this manufacturer’s distribution channel. The wholesalers then use a “push” strategy to the retailers, and the retailers promote to the consumers. A “push” strategy usually involves the heavy use of personal selling and perhaps sales promotions such as demonstrating the product at trade shows.

When a “pull” strategy is used, a manufacturer directs the promotional effort to end users — usually ultimate consumers. The intention is to build up a consumer demand so that these people will ask for the product at retail stores. The retailers, in tum, will demand the product from wholesalers. In effect, the promotion to consumers is designed to pull the product through the channels.

As a practical matter, these “push-pull” strategies are extremes. Rarely a company does employ one of these strategies exclusively. Most firms— especially those marketing to ultimate consumers—both push and pull their product through the channels.

PLANNING OF MARKETING COMMUNICATIONS

> Revealing of the target audience

Target audience is potential buyers of the goods of the firm, existing buyers. The audience can consist of separate persons, groups of persons, concrete contact audiences or general public.

‘Definition of desirable response

Maximum favorable reaction of an audience comes to light in fulfillment of purchase.

Prior to the beginning of work with an audience it is necessary to know, in what condition it is and in what condition it is necessary to transfer.

Kinds of conditions of consumer readiness are as follows: awareness, knowledge, preference, conviction, fulfillment of the purchase.

>       The choice of the reference

The choice of a motive:

– Rational motives (quality, profitability, value, operational parameters) . Emotional motives (awakening of the feeling of fault, fear, pleasure, pride, etc.)

– Moral motives (appeal to the feeling of validity and decency of an audience).

The structure of the reference: . Whether to make in circulation a precise conclusion or to give it to an audience;

Whether to state only arguments pro or bilateral; Whether to result significant arguments right at the beginning or in the end. The form of the reference (depends from form of communications) At the oral reference: . Selection of formulations;

•        The tempo of speech, rhythm, articulateness;

•        The speech expressiveness;

•        Look, gestures, clothes, hair dress.

>       Choice of means of information distribution

•        Channels of the personal communications;

•        Channels of the impersonal communications (the press, radio, TV, creation of the certain environment, action – press conferences, opening ceremonies, etc.);

•        The account of a role of leaders of opinions;

>       Choice of the properties describing. The source of the information

The choice of the informants is reliable (known doctors; former addicts – for struggle against a narcotics, etc.)

The factors providing trust to a source of the information:

•        Professionalism;

•        Consociations;

•        Appeal (frankness, the sense of humor, naturalness)

Gathering of the information acting on to channels of reciprocal communication

The feedback is set by means of interrogation of a target audience.

FORMATION OF DEMAND FOR GOODS AND SERVICES DURING THE MARKETING ACTIVITY

The appeals that might be used to advertise given products are as numerous and varied as the motives of those to whom they are directed. The possibilities for verbalizing or symbolizing a given appeal are infinite; however, the appeal objectives of a typical pharmaceutical promotion usually fall into one or more of the following categories:

>       To create awareness of the existence of a product or brand;

>       To create a brand image;

>       To supply information regarding benefits and superior features of the brand, e.g., reduction of side effects, ease in administration;

>       To combat or offset competitive claims;

>       To build familiarity and easy recognition of a package or a trademark;

>       To build the corporate image and a favorable attitude toward the company;

>       To establish a reputable platform for launching new brands or products;

>       To register a unique selling proposition in the minds of the prescriber while stimulating sales.

Sales promotion – It is a complex of the actions directed on attraction of the interest of clients to the goods. It is subdivided into stimulation of the enterprises of the channels of distribution and stimulation of consumers. The sales promotion activity has some characteristics:

•        appeal and informative;

•        prompting to fulfillment of the purchase;

•        the invitation to fulfillment of the purchase.

The subjects of sales promotion are:

•        buyers;

•        intermediaries;

•        sellers.

For stimulation of buyers the pharmaceutical enterprises should use:

>       Financial (different kinds of discounts), the credit, distribution or dispatch of free-of-charge samples;

>       Bonus sales, coupons;

>       Competitions and lotteries;

>       Use of packing, campaign of the expanded sale of the goods;

>       The service policy:

>       Direct or personal sales (assume the use of direct-sales representatives and trading agents for dialogue with each consumer).

Classification of doctors depending on reaction to « risk of purpose» of medicines

– innovators (the first appoint a preparation);

– early adopters (appoint medicines after the analysis of the information and results of innovators);

– early majority (appoint medicines after several years of successful applica¬tion);

– late majority (appoint medicines after long-term application);

– conservatives («laggards») (appoint medicines after it becomes traditional).

Usually pharmaceutical enterprises teach their agents to stimulate the sales. The purposes of training programs are:

– acquaintance of the trading agent with mcdicines firm (history, problems, control systems, financial structure, the basic goods and date cm the volumes

of selling);

– acquaintance of the trading agent with the goods of firm;

– acquaintance of the trading agent with features of clients and competitors;

– training in order to carry out effective presentations;

– acquaintance of the trading agent with features of his work and the duties connected with it.

For stimulation trading agents the following methods are used:

•        carrying out trading meetings;

•        the organization of competitions of sellers;

•        awards, celebrations, payments from the profit.

Payment of trading agents is: fixed payments; variable payments; com¬pensation of expenses; additional payments.

PRESENTATION

Presentation is a personal selling, the activities that involve approaching the customer, giving a sales talk, meeting objections, and closing the sale.

The actual sales presentation will start with an attempt to attract the prospect’s attention. The sales person will try to hold the customer’s interest while building a desire for the product. Then the sales person will try to close the sale (action). All the way through the presentation, the sales person must be ready to meet any hidden or expressed objections that the prospect may have.

ATTRACT ATTENTION TO THE APPROACH

Several approaches may be used to attract the prospect’s attention and start the presentation. The simplest one is merely to greet the prospect and state what you are selling. While this is direct, in many situations it is not so effective as other approaches. If the sales person was referred to the prospect by a customer, the right approach might be to start out by mentioning this common acquaintance. Sometimes this is called the “Joe sent me” approach. The sales person might suggest the product benefits by making some startling statement. One sales training consultant often greeted a prospect with the benefit question, “If I can cut your selling costs in half, and at the same time double your sales volume, are you interested?” A fourth approach, which can be effective if the sales person has a new product, is simply to walk in and hand the product to the prospect. While the prospect looks it over, the sales person can start the sales presentation.

HOLD INTEREST AND ARISE DESIRE

After attracting the prospect’s attention, the sales person can hold this interest and stimulate a desire for the product by means of the sales talk itself There is no common pattern here. Usually, however, a product demonstration is invaluable. Whatever pattern is followed in the talk/the sales person must always show how the product will benefit the prospect.

Many companies insist that their sales people use a “canned” sales talk. That is, ail representatives of the firm must give essentially the same presentation. Although many people may feel that this is a poor practice, it has been proved time and again that a canned sales talk can be effective. These presentations ensure that all points are covered.

MEET OBJECTIONS AND CLOSE THE SALE

After explaining the product and its benefits, the sales person should try to close the sale and write up an order. As part of the presentation, the sales person may periodically venture a trial close to sense the prospect’s willingness to buy. By posing some “either-or” questions, a sales person can start to bring the presentation to a head.

The promotional strategy and the product life-cycle stage

Market situation Promotional strategy

Introductory stage

Customers do not realize that they want the product, they do not understand how it will benefit them.        Inform and educate potential customers. Tell them that the product exists, how it might be used, and what want- satisfying benefits it provides.

In this stage, a seller must stimulate primary demand — the demand for a type of the product—as contrasted with the selective demand—the demand for a particular brand.

Normally, heavy emphasis must be placed on personal selling. Trade shows are also used extensively in the pro¬motional mix. Rather than call on customers individually, the company can promote its new product at some type of trade show where prospective customers come to the seller’s exhibition. Manufacturers also rely heaviiy on personal selling to attract middlemen to handle a new product.

Growth stage

Customers are aware of the product benefits. The product is selling well, and middlemen want to handle it.         Stimulate the selective (brand) demand. Increase the emphasis on advertising. Middlemen share more of the total promotional burden.

Maturity stage

Competition intensifies and the sales level is off.         Advertising is used as a tool of persuasion rather than only to provide information. The intense competition forces sellers to devote larger sums to advertising and, thus, contributes to the declining profits experienced in the maturity stage

Sales-decline stage

Sales and profits are declining. New and better products Jtfecoming into the market. All promotional effort should be cut back substantially, except when attempting to revitalize the product.

Advertisement and sales promotion are basically the two important features used to promote the sale of the product. But they differ in their ways. Advertising on one hand is the form of mass media communication directed towards influencing the end consumer.

Whereas sales, promotion on the other hand deals with the mass communication directly towards informing and influencing the channels of distribution. Both the sales promotion and advertisement help in product promotion; they enable a firm to face the competition in the market for its survival.

They promote the brand and also are useful in the launch and introduction of
new products. They lead to increase in production, which in turn reduces the
overhead expenses. Hence it helps in bringing down the selling price. But on
contrary they also have certain disadvantages as its very costly method of product
promotion and do not necessarily increase the demand and sales of production.
It involves a huge wasteful expenditure because the majority of advertisements
either escapes the attention of the people or is ignored by them. It multiplies
the need of the people by inducing them to buy the things they do not really
need or cannot effort to buy.

Thus it can be concluded from the following study that pharmaceutical marketing is to be done with a lot of restrictions, as the products should not be misrepresented near the consumer, which may seriously harm them.

Introduction

There is no universally accepted distinction between these two terms that is advertising and sales promotion. To some advertising includes all forms of mass media communication directed towards influencing the end consumer. Sales promotion on the other hand, includes the forms of the mass communication directed towards informing and influencing the channels of distribution (e.g. distributors, retailers etc). The term sales promotion cannot be taken to mean what is commonly does. Sales promotion is only a part of the promotion. Basically promotion is an “exercise in information, persuasion and influence”. Promotion has come to mean the over all coordination of advertising, selling, publicity and public relations. Promotion is helping function designed to make all other marketing activities more effective and efficient. But sales promotion as such helps only the selling activity. Still, there exist some differences of opinion on the real connotation of the terms sales promotion. Hence a price of the product literature mailed directly to a customer is advertising, literature distributed by retailers is sales promotion. Thus Sales promotion merges on one side into advertising and on the other into personal salesmanship. It is concerned with the dissemination of information to wholesalers, retailers, customers (both actual and potential) and to the salesman.

Advertising

Advertising is an art used to familiarize public with the product by informing of its description uses, its superiority over other brands, sources of its availability and price etc. advertising is not only merely a propaganda but it is a paid form of communication. The advertisers have to pay for the space and time used to communicate the message to his customers. A basic responsibility of a marketing manager is to ensure that the company’s message reach its potential customers. A main method by which companies deliver their message to group of customers and, in fact, make there initial contacts with most potential customers is through advertising. Advertising is a powerful tool which individuals, business and non- business organizations use for informing persuading and reminding their target audiences. Various authors have defined advertising in the following ways:

Main objectives of advertisement:

–To create a demand for new products by explaining it’s utility

–To announce a new product or service

–To increase its sales by attracting new customers

–To create brand preferences

–To expand the market for new buyers

–To assist the salesmen in their selling efforts

–To warn the public against imitation of the product of the firm

–To prepare ground for new products

–Barring new entrance

–To make special offers through sales promotion

–To neutralize competitors advertising

–To enhance goodwill of the firm

Advantages of advertising:

 –It helps in the introduction of new products in the market

–It promotes the sales of goods and services by persuading the people to buy
them

–It helps in creating a demand and hence a regular production

–It enables a firm to face competition in the market for its survival

–It enables a firm to improve its reputation by highlighting its achievements
to the public

–It generates employment for artists and other persons in the line

–It enables the manufacturer to expand his market

–It helps in maintaining uniformity and stability of prices

–It leads to increase in production, which in turn reduces the overhead expenses.

–Hence it helps in bringing down the selling price of the goods

–It provides revenue to newspapers, magazines, television and radio.

Disadvantages of advertising:

It multiplies the needs of the people by inducing them to buy things, which they do not, really need or cannot effort.

It increases the cost of production

It does not necessarily increases the demand and sales of the production.
It simply shifts from one seller to another

It involves a huge wasteful expenditure because the majority of advertisements
either escape the attention of the people or are ignored by them

Many a time, the facts are misrepresented in the advertisement.

Advertisement and Pharmaceutical industry:

The advertisement of pharmaceutical products should be truthful. There should not be any wrong statement regarding its contents and their percentage. It should provide full details regarding the action and uses, proprietary name as well as the genetic name, dosage form, mode of administration, side effects, treatment of toxic, effects, precautions and contraindications. The above statement should be truthful, scientifically correct and proved. W.H.O (World Health Organization) has passed this resolution regarding advertising of the pharmaceutical products. The purpose of advertising in the ethical pharmaceutical market is the same as that for any other products there are a lot of restrictions on it.

A customer (patient) cannot use a medicine without proper prescription of a physician. The majority of pharmaceutical products and their direct advertisement are prohibited according to the drug and magic remedies (objectionable advertisements) act. However, general/home remedies, products, such as, pain balm, inhalers, Iodex, antiseptic creams and other products, which do not require any prescription for their purchase can be advertised by any of the direct methods of advertisement.

There are following methods which are used for advertising pharmaceutical
products:

–Direct mailing

–Newspaper, professional magazines and journals

–Television, radio and other audio visual media

–Personal contact or detailing

–Miscellaneous methods

Direct mailing:

In this method a mailing list of registered medical practitioners, chemists
and druggists is prepared. Letter, leaflets, folders and catalogues are sent
to them regularly through mail to inform them of the details of the products
manufactured by the firm. Mail advertising has a personal appeal because it
is addressed to a particular person. It also maintains secrecy in advertising.
The main drawback of this technique is that it has the limited coverage.

Television radio and other audiovisual media:

Television is the latest and the fastest growing medium of advertising. It is very effective medium because it appeals to both the eye and ear. The product can be demonstrated and explained on the television. However, it is very costly method of advertising. Radio advertising is becoming more popular these days and the advertisements are generally transmitted through commercial services of All India radio. Radio advertisements carry an effective appeal as they reach out to all sections of society. People can listen to them even when they are busy with other activities. The big pharmaceutical companies generally sponsor entertaining programs on TV and radio to popularize themselves and their products.

Personal contact or detailing:

It is a process of sales promotion and advertisement by personal contacts. The pharmaceutical manufacturers engage persons (sales representatives and medical representatives) for making personal contacts with sellers or prescribes and influence them in favor of their products. This method of advertisement is very costly. However, the pharmaceutical manufacturing companies for the following reasons prefer it.

–It provides an opportunity to inform the physician about new products of the
firm

–It also helps to refresh the memory of physicians regarding the old products
of the firm

–It clears doubts a physician may have regarding a particular product of the
company

–It helps to have a feed back from physicians regarding the products of the
firm

–It provides the company with an opportunity to demonstrate and explain its
products.

Miscellaneous methods:

Posters, billboards and electrical displays are also used for advertisements. The posters are pasted on walls. Billboards are part on electrical poles and at crossings. Colorful electrical lights in artistic designs or neon signs are put up at railway stations, bus stops and other public places. Out door advertising is highly flexible and attracts immediate public attention. Many pharmaceutical firms offer gift items to the physicians and retailers to pass on to selective customers. These items may be diaries, ball pen, penholders, desk trays, key chains, paperweights and calendars. These articles are of the daily use and therefore they continuously remind their uses of the firm and its products. Generally the name and address of the advertiser is printed or inscribed on those items.

Essential features of good advertisements:

The text or body of an advertisement is known as an advertising copy. It contains headings, messages, advertiser’s name and address, photographs etc. The advertising copy should be carefully drafted so as to include the following essential features –

–It should be made attractive by using pictures; headline, attractive boards
etc. so as to make people read, see or listen to it.

–It should create a permanent impression on the minds of people. Repeated use
of a brand name of trademarks is very helpful.

–It should give useful suggestions to the public. For example, the advertisement
of Vicks 500 tablet suggests its use for cold and cough.

–It should educate the people about the use of the product and its benefits.
For example, in the advertisement of baby milk powder, the instructions for
preparing milk are required.

–It must contain solid arrangement and proof to convince the consumers about
the superior quality of the product. For example, Anacin tablet relives pain
faster as it is micro fined.

–It should create the need for the product in the minds of the people. It should
appeal to the various instincts of the people.

–It should induce people to buy the advertised product.

Window display:

This is one of the mediums of advertising and sales promotion. The goods are exhibited in artistically laid-out window in front of the shops or at important business centers like railway stations, bus stops. Big business firms set up large show rooms to display their products. The retail chemists exhibit their products in the show windows of their shops.

The main aim of window display is to attract customers and thus to promote
sales. It creates a good impression about the retail pharmacy. The following
principles of window display should be kept in mind.

–It should reflect the characters of pharmacy. For this purpose the insignia
of pharmacy (green cross +) should be fixed.

–It should display seasonal items.

–It should show the price of items.

–The window display should be well lit during night.

–The items displayed in the window should be changed frequently gives freshness
and newness to the display.

– It should include certain moving objects if it is compatible with the display.

There should be decorative background of the display, which can be made by
using colored wallpapers, thermo-cool, flowers of good quality stain cloth etc.

The color plays an important role in window display. It helps in arresting
the attention of passerby and creates a pleasing impression. The colors have
the attention value in the following order –

Red > orange
> yellow > green
> blue

Dark and light shades of the same color can attract the attention of large
people. It is better to use a deep color in contrast with or in harmony with
other colors. Brilliant lighting in window display attracts people. The reflector
concealed at the top and front the merchandise should be used. Colored lighting
of the entire window is not effective for drug stores. Only the non-ethical
products should be displayed in show windows. The table below indicates both
contrasting and harmonizing color combinations with primary colors that make
for impressive window display.

Advantages of window display:

Window display acts as a silent salesman for promotion sales

– It is a good methods of advertising

– It makes a drug store move decorative and attractive

– It attracts the customers as the passerby’s

– It creates good impression on the customers when he enterd the drug store

 Sales promotion:

The main aim of any business is to earn maximum profit and this is possible only through maximum sales. The maximum sales can be achieved by using various techniques of sales promotion. Sales promotion includes those marketing activities, other then personal selling, advertising and publicity, that stimulates consumers purchasing and dealers effectiveness such as window display, shows and expositions, demonstrations etc. Sales promotion is concerned with the creation, application and dissemination of materials and techniques that supplement advertising and personal selling. Sales promotion makes use of direct mail, catalogues, trade shows, sales contents, premiums, samples, window display and other aids. Its purpose is to sell a certain brands and to make consumers more eager to buy that brand. Personal selling and advertising do include prospects to make their decisions. ‘Sales promotion provides an extra stimulus’.

According to various authors sales promotion can be defined as: –

“Sales promotion means any step that are taken for the purpose of obtaining an increased sales” By, A. H. R. Delens

“Sales promotion as a tool of market promotion gives rise to increase in production usage as well as expansion of market for a product or introduction of a new product” By, John. L. Luickkand and William Lee Ziegler.

Classification of sales promotion:

There are three types of sales promotion – Customer promotion, trade promotion and sales trade promotion

Customer promotion

There the target beneficiaries are the customers. Here the offers are offered
to the unlimited customers. Such an offer is always for a short period. If the
period increases, the validity of the promotional measures decreases.

Trade promotion: 

There the target is the middleman. They are being offered the incentives with
the hope that they will stock more and push the product to the customers. This
type of sales promotion is very important effort to seek the cooperation of
the middleman.

Sales trade promotion:

This type of sales promotion emphasis to increase and boost up the morale of
the sales people. They are being offered commissions, bonus and other incentives
for the increase of sales so that they work directly.

Target audiences for sales promotion

Objectives of sales promotion:

To influence the customer for purchasing the product or service instantly because the sales promotion time is very limited and if the customer does not respond to it quickly, they may lose the offer. It increases the sales directly by publicity through media that are complementary to the press and poster advertising.

– To introduce new product

– To attract new customers

– To face the competition effectively

– To maintain old customers

– To improve public image of the firm

– To popularize the brand name of the product

– To induce customer to purchase more items

Principles of sales promotion:

The promotional program should proceed in the light of the pretest experiences. There should be some pre testing in order to check that proposed method is likely to attain the desired result. Clear objects must be ascribed to the campaign. Result must be evaluated at the end of exercise. The most effectively of attaining these objectives must be throughout and selected.

Sales promotion devices used are:

–Money refund offer

– Contests of sweepstakes

– Price off or temporary price reduction

– Coupons

– Premium or bonus offer

– Trading stamps

– Fair and exhibition

– Free samples

Money refund offer:

This offer is generally stated in media advertising that the manufacturer
will return the price if the product is not to the satisfaction of the consumer
within a stated period. For example – bull- worker exercise is promoted the
way.

Contest or sweepstakes:

At times, contests are arranged with a view to attract new users to the company’s
products. An opportunity under this device is given to consumer to contest with
a chance to win a cash price, free air trips or goods. It is an indirect manner
of introducing new product.

Price off or temporary price reduction:

This involves an offer to consumer, a certain amount of money off over the
regular price of a product. This is done to attract consumers to other brands
to its product/brand.

Coupons:

A coupon is a certificate that entitles the consumer to a specified saving
on the purchase of a specified product. The manufacturers through the retailers
usually issue these coupons. The retailers are later or initially reimbursed
the value of coupons by the manufacturers.

Premium or bonus offers:

In this technique the firm offers a certain quantity of the product free of
cost on the purchase of a specified quantity of the product. The premium offers
can be of three types: –

With pack premium –The customer gives the free product along with the product
purchase. For example – one stainless steel teaspoon is inserted as free gift
inside the 240 ml bottle of cough syrup.

A reusable container: The product is packed in the container that has utility
for the customer after it has consumed. For example – The container of ayurvedic
preparation chawanprash is available in attractive container, which can be reused
in kitchen.

Free in the mail premium: A free gift is given to the consumer on sending a
proof of purchase i.e. cash memo or wrapper of the product.

Trading stamps:

Trading stamps are issued to customers through retailers in proportion to
the amount of purchase. The customer goes on collecting the stamps on his purchase.
Once he has collected the stamps of an adequate amount, he obtains a free product
in exchange of his stamps. This technique induces customers to buy products
from those retailers who offer such stamps.

Fair and exhibition:

Fair and exhibition are organized to display and popularize products of the
firm. For example – in various medical and pharmaceutical conferences, seminars,
a scientific congress, the pharmaceutical firms and their allied industries
participate in the exhibition organized by their organizing committee. On such
occasions the firms also distribute free literature to introduce itself and
its products.

Free samples:

Many pharmaceutical firms send their medical representatives to the physicians
for detailing and distributing of free samples of their manufactured goods.
The technique is very useful way of introducing new products. However it is
very expensive method and used only by big concerns.

Flow chart for sales promotion:

Salesman:

A person who is engaged in selling of goods to customer is known as a “salesman”. It is generally said that salesman are born and not made. However, it is not true these days, because any person who wants to adopt a sales profession gets intensive coaching and training. The success of a firm mainly depends on the performance of their sale force. Therefore, it is essential to engage well-qualified trained, energetic and young persons as the company’s sales force.

Qualities of a salesman: The sales man has personal, mental,
social qualities and vocational skills

Personal qualities:

A good salesman must have an attractive personality. He must posses good health
and sound physique. A salesman’s job involves a great physical stain because
of its touring nature. So only the person with a good health can work effectively.
He should have a clear voice and his tone of speaking should be natural so as
to impress the persons dealing with him. He should also be well dressed because
it adds to his charming personality always creates a goods impression on buyers.

Mental qualities:

A good salesman should posses a sound memory, presence of mind, imagination,
foresightedness, sound judgment and initiative. He should be intelligent enough
to understand the nature and requirement of potential buyers. He must have the
imagination to look at things from the viewpoint of customers. A salesman can
win regular and permanent customers only through good mental qualities.

Social qualities:

A good salesman must have a linking for people and the ability to mix with
them. He must not be shy and have reserved nature. He should be sincere, dependable,
cooperative and honest. A salesman has to deal with different types of customers.
Therefore ho should have patience to listen to them i.e. his customers and remove
their objections. He should always be polite and courteous while dealing with
his customers. He must help the customers in selecting the right type of goods.
Courtesy costs nothing but wins favor and permanent customers.

Vocational skills:

A good salesman must have specialized knowledge of selling techniques. Salesmanship
is a highly skilled vocation. It requires certain training and aptitude to have
a through knowledge of the product, customers and competitive products already
available in the market. Such knowledge is essential to handle objections of
the customers and also for convincing them to buy the product. A person cannot
be good salesman unless he has the required ambition and enthusiasm to become
a successful salesman.

Steps in sales promotion process:

   Step I

Defining the sales promotion target.

  Step II

Setting sales promotion objectives.

  Step III

Setting the sales promotion budget.

  Step IV

Developing the sales promotion strategy.

  Step V

Selecting type of sales promotion.

  Step VI

Coordinating the plans.

  Step VII

Evaluating sales promotion effectiveness.
Advertising	Sales
A firm as its basic of fundamental tool production uses it. It normally has long-term objectives like building brand awareness or building consumers loyalty or repositioning a brand.   It helps sales by adding some durable and long-term value to the product.   Advertising is mostly an indirect way for consumer to buy a product.	It is generally designed to supplement advertising and facilitates personal selling. It performs the immediate task of increasing current sales. It aids selling by temporarily changing the existing price value relationship of the       product. Sales promotion is a direct and almost open inducement to consumers to immediately try the product.

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