Below the Line Tools

1.0 Definition of Below the Line Tools
The terms ‘below-the-line’ promotion or communication refers to forms of non-media communication, even non-media advertising. Below-the-line promotions are becoming increasingly important within the communications mix of many companies, not only those involved in products, but also for industrial goods. http://www.coolavenues.com/mba-journal/marketing/below-line-promotion For my understanding, below the line tools means that the promotion is not using the television, internet, and outdoor media (billboard) and so on. What can I say is that this tool is some sort like using the ‘old school’ advertising for example personal selling, public relation, sales promotion, direct marketing and sponsorship. It is more to the mouth to mouth situation when market or selling our product. Below are the 5 tools that available in this country outlining the advantage and disadvantages? 1.1 Personal Selling

Personal selling can be defined as follows:
Personal selling is oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to “close the sale” http://tutor2u.net/business/marketing/promotion_personalselling.asp For my understanding, personal selling is more to ‘mouth to mouth’ situation. It means that the seller is communicating with the potential buyer (suitable segments) to encourage them to buy what are the seller is selling. It is two people communicate with each other. The talk skilled is needed to influence the potential buyer to buy the product or service so that they (potential buyer) will buy their product. Personal selling is one of the oldest forms of promotion. It involves the use of a sales force to support a push strategy (encouraging intermediaries to buy the product) or a pull strategy (where the role of the sales force may be limited to supporting retailers and providing after-sales service). Below is the diagram of the sales force of personal selling: 1. Prospecting

2. Communicating

6. Allocating
3. Selling
Six activity of sales force

4. Servicing
5. Information Gathering

First the personal seller must find prospect or potential buyer to promote or buy the product. It means that the seller must look on their job, age, the usage of the product and suitable usage of the product to the customer. When the sellers locate the suitable one, they will communicate to the customer about the product they are selling. This activity requires the seller to be good in communicating to influence them to buy the product. After that, they sell the product to the customer. Then, give the service to the customer. This activity providing support and service to the customer in the period up to delivery and also post-sale. Giving the service is not enough, the seller must find or gathering information about the market for feedback into the marketing planning process. And lastly allocating the product, in times of product shortage, the sale force may have the power to decide how available stock is allocated.

1.2.1 Advantage
Advantage of personal selling
Relationship
Face to face

Demonstrate the product
Respond directly

Product Information

Face to face means that the seller can give full attention to the customer and same as the customer. In this situation the seller can know the behavior of the customer whether giving a good respond or not. It also can make customer to ask question on the spot so that they understand about the product. The seller can give the customer about the product information directly so that they understand the situation is all about (buying process). The seller also can demonstrate the product to the customer so that they (customer) know how the product works. And lastly is about making the long term relationship to the customer so that the repeating purchase will happen to this relationship.

1.2.2 Disadvantage
Disadvantage of personal selling

Misunderstood
Not for everyone

Diagram shows the disadvantage of the personal selling. Nowadays people in Malaysia misunderstood about the personal selling. They think this type of selling is cheating and lie to the customer. Sometime the product is not good as they told. It makes them think that trusting to the personal seller is the most stupid thing to do. Sometime the product is not good and doesn’t function well. It will make the customer frustrated and will tell other people to not trust to the personal seller. Not everyone can be a personal seller. Job turnover in sales is often much higher than other marketing positions. For companies that assign salespeople to handle certain customer groups (e.g., geographic territory), turnover may leave a company without representation in a customer group for an extended period of time while the company recruits and trains a replacement.

1.2 Sales Promotion
Sales promotion can be defined as:
Activities, materials, devices, and techniques used to supplement the advertising and marketing efforts and help coordinate the advertising with the personal selling effort. http://www.answers.com/topic/sales-promotion-2

For my understanding, the sales promotion usually using the materials such as coupon, promotional discounts, contest, gift and offer to the customer. It is more using the product to give a free gift to the customer. It will influence them to buy the product with win-win situation (to the customer, they can get benefit from purchasing the product). Sales promotion is an important component of a small business’s overall marketing strategy, along with advertising, public relations, and personal selling. 1.3.3 Effect on consumer behavior

Price discrimination
Advantage of sales promotion

Advantage

Effect on trade behavior

Producers can introduce price discrimination through the use of sales promotions. They can charge different prices to different consumers and trade segments depending on how sensitive each segment is to particular prices. Coupons, special sales events, clearance sales and discounts are examples to explain the phenomenon. On the effect on consumer behavior as sales promotions are mostly announced for a short period, customers may feel a sense of urgency and stop comparing the alternatives. They are persuaded to act now rather than later. For example with every 500g pack of Dynamo, you get a free glass. On the effect on trade behavior short-term promotions present an opportunity and encourage dealers to forward buy. This forward buying ensures that retailers won’t to go out of stocks. As dealers have more than the normal stocks, they think it advisable to advertise in local media, arranged displays and offer attractive promotion deals to consumers. These actions help in increasing the store traffic. For example Buy 2 dozen shampoo Sunsilk & get 2 Sunsilk free. 1.3.4 Disadvantage of sales promotion

Disadvantage
While sales promotion is a powerful and effective method to produce immediate short term positive results, it is not a cure for a bad product or bad advertising. In fact, a promotion is speed up the killing of a bad product. Increase price sensitivity

Quality image will become tarnished

Increase price sensitivity
Consumers wait for the promotion deals to be announced and then purchase the product. This is true even for brands where brand loyalty exists. Customers wait and time their purchases to coincide with promotional offers on their preferred brands. Thus, the routine sales at the market price are lost and the profit margin is reduced because of the discounts to be offered during sale-season. Quality image will become tarnished

If the promotions in a product category have been rare, the promotions could have a negative effect about its quality image. Consumers may start suspecting that perhaps the product has not been selling well, the quality of the product is true compared to the price or the product is likely to be discontinued because it has become outdated.

1.3 Public Relation
Public relations (or PR) are a field concerned with maintaining public image for high-profile people, organizations, or programs. Public relations (PR) concerns professions as applied to public message shaping for the functions of communication, community relations, crisis management, customer relations, employee relations, government affairs, industry relations, investor relations, media relations, mediation, publicity, speech-writing, and visitor relations. http://en.wikipedia.org/wiki/Public_relations

From my understanding of the word public relation is the method of communicating among organizations. Through this industry, a business builds up, sustains and manages the image it would want to project to other establishments. It also using the news or business press to carry positive stories about your company or your products cultivating a good relationship with local press representatives 1.4.5 Advantage of Public Relation

Spreading the information to many locations
Advantage
Highly credible form of promotion

More detailed information

First, Public Relation is often considered a highly credible form of promotion. One of PR’s key points of power rests with helping to establish credibility for a product, company or person in the minds of targeted customer groups by capitalizing on the influence of a third-party (media). Second, a well-structured PR campaign can result in the target market being exposed to more detailed information than they receive with other forms of promotion. That is, media sources often provide more space and time for explanation of a product. Third, depending on the media outlet, a story mentioning a company may be picked up by a large number of additional media, thus, spreading a single story to many locations. 1.4.6 Disadvantage of Public Relation

Clutter of commercials
Lack of Coordination

Disadvantage

Perhaps, the major disadvantage of PR is the potential for not completing communication process.While PR ( public Relations ) messages can break through the clutter of commercials, the receiver may not make the connection to the source. Public Relations may also mis-fire through mis management and a lack of co-ordination with the marketing department. When the marketing and PR department operate independently, there is a danger of inconsistency in communication, redundancies in efforts and so on. 1.4 Direct Marketing

Direct marketing is an “interactive system of marketing which uses one or more advertising media to affect a measurable response and/or transaction at any location.” http://www.answers.com/topic/direct-marketing-2

Based from my understanding, direct marketing is a sometimes controversial sales method by which advertisers approach potential customers directly with products or services. The most common forms of direct marketing are telephone sales, solicited or unsolicited emails, catalogs, leaflets, brochures and coupons.

1.5.7 Advantage of Direct Marketing
Relationship Building
Flexible Targeting
Advantage

Rapid delivery
Ease of management

Flexible Targeting
Direct marketing enables you to talk directly identify, isolate and communicate with well-defined target markets. This means you get a higher conversion and success rate than if you tried communicating to everyone in the mass market. And direct marketing is also far cheaper than mass market communication. Ease of Management

Direct marketing provides greater control and accountability than other marketing methods. It is easy to measure results because you know exactly how many people you’ve contacted in the first place. Once you’ve run a direct marketing campaign and know the conversion rates involved, you can work on refining and improving your success rates. Plus it also makes it easier to plan, forecast and budget for future direct marketing campaigns. Rapid Delivery

Direct marketing is both swift and flexible in achieving results. This is especially true for telemarketing, one of the direct marketing tools, as the results of a conversation can be logged immediately and scripts adjusted straight away to improve results. Relationship Building

Direct marketing is far more effective at initiating and developing a meaningful dialogue with new customers. From the outset you have a direct relationship with them, which can also be used as part of a push pull strategy to stimulate demand for retailers.

1.5.8 Disadvantage of Direct Marketing
* Some people do not like receiving offers in their mail, and throw them immediately without even opening the mail. * Resources need to be allocated in the maintenance of lists, as the success of this kind of promotional campaign depends on the quality of your mailing list. * Long lead times are required for creative printing and mailing * Producing direct mail materials entail the expense of using various professionals – copywriter, artists, photographers, printers, etc. * Can be expensive, depending on your target market, quality of your list and size of the campaign.

1.5 Sponsorship
Advertising that seeks to establish a deeper association and integration between an advertiser and a publisher, often involving coordinated beyond-the-banner placements. http://www.marketingterms.com/dictionary/sponsorship/

For my understanding, sponsorship is a business relationship between a provider of funds, resources or services and an individual, event or organization which offers in return rights and association that may be used for commercial advantage in return for the sponsorship investment.

1.6.9 Advantage of sponsorship
Driving sales
Positive reaction
Advantage

Corporate Citizen

Some companies are looking forward to improve how they are perceived by their target audience. Sponsoring events that appeal to their market are likely to shape buying attitudes and help generate a positive reaction. Coca Cola, for example is always looking to generate a positive influence of their products in the minds of their consumers and as such regularly support events they feel can influence consumer opinions. When some company doing a sponsorship, they can up their sell/driving sell through anything that there are sponsor. Another powerful sponsorship objective allows companies to be viewed as a “Corporate Citizen.” To be seen supporting the community and contributing to its economic development is extremely powerful and creates enormous goodwill.

1.6.10 Disadvantage of sponsorship

Disadvantage

Only one winner
Poor value

POOR VALUE – The sponsor may feel they have not received enough publicity for the amount of money they have given. There are many ways a company can publicise itself, and doing it through sports sponsorship is fairly risky. If a team or event is a massive success and attracts media attention, then the sponsor has had good value. If the team or even was a failure with little or no media coverage, then the sponsor will have had poor value for money. ONLY 1 WINNER – It is important to the sponsor to be associated with a team or individual that is successful. Sponsors associated with teams who are failures will not get the right kind of publicity. (E.g. if team is relegated from the Premiership this is not the right kind of publicity, but if a team is champion this is a different matter).

TASK 2
The 2 of the below the line tools that are popular is personal selling and direct marketing. nPower PEG is a good product and require someone to explain it in every detail of it and personal selling is the best way. 2.1 Personal selling

Personal selling is a tool that can give information directly to the consumer. It is a good way to introduce it to the consumer. Push strategy and pull strategy is a way to do on the consumer to sell and maintain the product to sell in the future. Personal selling can be defined as the delivery of a specially designed message to a prospect by a seller, usually in the form of face-to-face communication, personal correspondence, or a personal telephone conversation. (http://www.answers.com/topic/personal-selling) Unlike advertising, a personal sales message can be more specifically targeted to individual prospects and easily altered if the desired behavior does not occur. Below is the diagram of the personal selling:

Non target customer

Target customer
Personal seller

Diagram shows that the personal seller is targeting the target customer to sell the product. The target customer usually has the income to buy the product. For personal seller, picking the right customer is very important to influence them to buy the product. The non target customer is also important but the percentage for target customer to buy the product is 80% rather than non target customer is only 0%-50%. Is worth to try to sell the product to all people but target customer must be priority to the personal seller to sell the product. 2.2 Direct Marketing

People
Coupons
Leaflets
Emails
For the direct marketing, is has different tool that can sell or market the product. It is also known as the direct mail. Direct marketing is a sometimes controversial sales method by which advertisers approach potential customers directly with products or services. The most common forms of direct marketing are telephone sales, solicited or unsolicited emails, catalogs, leaflets, brochures and coupons. Successful direct marketing also involves compiling and maintaining a large database of personal information about potential customers and clients. Below is the diagram:

Brochures
Catalogs

Direct marketing have many tool to influence or promote the product to them. Emails are part of the direct marketing that can be successful in Malaysia because nowadays people in Malaysia exposed to the technology of using the internet. Catalogs also can be one of the thing can be information to the customer to buy nPEG product. In catalog, we can conclude detail about the product. People that read catalog is part of the target customer are can make selling become up. Same as leaflets, coupons and brochures that can influence them to buy the product. When we have this tool, our plan is not finished. We must have a good database regarding the customer that we want to tell. We can but this information to the other company in Malaysia (customer behavior, like, interest) to make some information to us to send the email to target customer. It is very important to do that because when we just send it to everybody, it will lead to the wasted. In direct marketing, information about the people is very important to tell the right customer about our product.

Example of diagram how information can be obtain through database

TASK 3
3.1 Business consumers
For the business consumers, I prefer we use personal selling to sell our product. They are many reasons that must use the personal selling. First is about the product. Product of nPEG is a good product. It is because this product is using the best material and the technology is from the USA. We can’t sell it on supermarket. It will make consumer thing that this product is not good. Usually, people will not buy the electronic product at hyper or super market. They will think this product is not good. Other reason is that, the information of the product is not well known because it is new to this country. Personal selling can tell information about this product to the consumer in every detail that the customer wants to know. When using the personal selling, they must be six activity of sale force. The 6 step is prospecting, communicating, selling, servicing, information gathering and allocating.