Objectives: Promotion strategy options Define promotion and its role in marketing
“Promotion” The act of a business communicating the benefits of their product / service with their customers Activities to prompt or entice customers to act in a certain way A “promotional mix” is a blend of all of the marketing communications the business generates to increase sales
The four main elements of a “promotional mix” are: 1.Advertising 3. Sales Promotion 2. Personal Sales 4. Publicity Let’s look at each ……
1. ADVERTISING Any paid form of communication of ideas or products in the "prime media" the message (what you want your communication to say) Advertising is intended to persuade and to inform The two basic aspects of advertising are: the medium (how you get your message across) »Examples: Newspaper, radio, TV, magazine, billboards, direct mail, internet, social media »(ie – Facebook, YouTube, Google Plus, etc.)
2. PERSONAL SELLING 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” Involves personal interaction with potential buyers of a product with the intention of making a sale
What are the main roles involved in personal selling ? Selling - contact with the customer, answering questions and trying to close the sale Prospecting - trying to find new customers Communicating - with existing and potential customers about the product range Servicing - providing support and service to the customer in the period up to delivery and post sale
3. SALES PROMOTION More than any other element of the promotional mix, sales promotion is about “action”. Providing incentives to customers to stimulate demand for a product Its ultimate goal is about stimulating customers to buy a product
Methods of Sales Promotion Coupons –Offer a discount or extra if “coupon” is redeemed there are many consumer sales promotional techniques available Which techniques are used depends on the particular business and product / service Discounting –a discount to the normal selling price of a product –more of the product at the normal price. Examples:
Gift with Purchase –The customer gets something in addition to the main purchase –Ie – sweater with magazine subscription, toothbrush with toothpaste, etc.. Rebates –customer receives a money refund after submitting a proof of purchase to the manufacturer. Contests –Offer customer chance to win a prize by entering a contest if they purchase your product (ie – win a cruise, TV, car, cash, etc.)
Frequent User / Loyalty Incentives –Repeat purchases may be stimulated by frequent user incentives. –Ie - frequent flyer points, AIR MILES, Petro Points, etc. Point-of-Sale displays –promotions that customers see in the store. –Attractive, informative and well-positioned point-of-sale displays Free Samples –Free trial of product / service to let them test it without investing any money
4. PUBLICITY The main goal of Public Relations to enhance a company’s reputation by presenting the company or individual to the world in the best light. otherwise known as "public relations" or PR. It is the communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly
As a result, companies will try to build goodwill with its target market through community, charitable events and special programs Contact local TV and radio stations and offer to be interviewed Examples: Using Social Media (ie – Facebook, YouTube, Google Plus) Offer or sponsor a seminar Write news releases and fax them to the media Sponsor a community project Support a charity (host event and donate proceeds)
Mix ElementAdvantagesDisadvantages Advertising Good for building awareness Effective at reaching a wide audience Impersonal - cannot answer all of a customer's questions Not good at getting customers to make a final purchasing decision Personal Selling Highly interactive - lots of communication between the buyer and seller Excellent for communicating complex / detailed product information and features Costly Not suitable if there are thousands of important buyers Sales Promotion Can stimulate quick increases in sales by targeting promotional incentives on particular products Good short term tactical tool If used over the long-term, customers may get used to the effect Public Relations Often seen as more "credible" - since the message seems to be coming from a third party (e.g. magazine, newspaper) Cheap way of reaching many customers Risk of losing control - cannot always control what other people write or say about your product
So….how do we ever decide on which elements and variables to use in our “promotional mix”?
You need to consider…… 1.Resource Availability the cost of each promotional tool the overall resource budget for the promotional campaign will often determine which tools the business can afford to use. 2. Market Size and Concentration Where are your customers and how many are there? If a market size is small and the number of potential buyers is small, then personal selling may be the most cost-effective promotional tool. If a market size is bigger and more spread out, then advertising may be more effective.
3.Intangibles The promotional mix needs to reflect the uniqueness of the product and the “arena” it is competing in What are you trying to achieve with your marketing efforts?
As a result, the “promotional mix” is a puzzle….you simply need to put the right pieces together in order to achieve your marketing goals.