Promotion

What this topic is about What is promotion? Effective methods of promotion for different types of product/business Factors to consider when choosing the promotional mix

Promotion = marketing communication Communication techniques aimed at informing, influencing and persuading customers to buy or use a particular It involves communication about the product or service Promotion is an element in the marketing mix

The Many Uses of Promotion Increase sales Attract new customers Encourage customer loyalty Encourage trial Create awareness Inform Remind potential customers Reassure new customers Change attitudes Create an image Position a product Encourage brand switching To support a distribution channel

Main Aims of Promotion The main aim of promotion is to ensure that customers are aware of the existence and positioning of products Promotion is also used to persuade customers that the product is better than competing products and to remind customers about why they may want to buy

Promotional mix The specific mix of promotional methods that a business uses to pursue its marketing objectives The main elements of the mix are: Advertising (offline & online) Sales promotion & merchandising Personal selling Public relations/publicity / Sponsorship Direct marketing The elements must be integrated in a cohesive, consistent and logical manner

Composition of promotional mix depends on: Stage in the product’s life cycle E.g. advertising & PR are often important at the launch stage Nature of the product What information do customers require before they buy? Competition What are rivals doing ? What promotional methods are traditionally effective in a market? Marketing budget How much can the firm afford? Marketing strategy Other elements of the mix Target market Appropriate ways to reach the target market

Two tests of promotional effort Was it effective? Did it achieve its objectives? How was response measured? Was it efficient? Were objectives achieved at the acceptable cost? Were any promotional overspends justified by better-than-expected sales?

Promotional effectiveness and efficiency Ineffective Efficient Objectives achieved at lowest costs Effective and cost efficient Low promotion budget but objectives not achieved Inefficient Objective achieved but at high cost Expensive promotion which fails to achieve objective

Advertising Paid-for communication Many different advertising media TV & radio, newspapers & magazines, online, cinema, billboards Consumers subjected to many advertising messages each day = hard to get through Mass market advertising is very expensive

Advertising + / - Advantages Disadvantages Wide coverage Control of message Repetition means that the message can be communicated effectively Can be used to build brand loyalty Often expensive Impersonal One way communication Lacks flexibility Limited ability to close a sale

Personal selling Promotion on a person to person basis Two way communications Meeting with potential customers to close a sale By telephone, at meetings, in retail outlets and by knocking on doors Highly priced, low volume and highly technical products rely heavily on personal selling

Personal selling + / - Advantages Disadvantages High customer attention Message is customised Interactivity Persuasive impact Potential for development of relationship Adaptable Opportunity to close the sale High cost Labour intensive Expensive Can only reach a limited number of customers

Sales promotion Tactical, point of sale material or other incentives designed to stimulate purchases Short term incentives to increase sales Some promotions aimed at consumers; -others at intermediaries or sales force

Examples of sales promotion Coupons Money off Competitions Demonstrations Free samples Loyalty points Free gifts Point of sale displays BOGOF Merchandising Trade in offers

Sales Promotion + / - Advantages Disadvantages Effective at achieving a quick boost to sales Encourages customers to trial a product or switch brands Sales effect may only be short-term Customers may come to expect or anticipate further promotions May damage brand image

Merchandising The process of maximising the effectiveness of retail distribution Displaying products to maximise sales Usually operates at the “point-of-sale”

Public relations (“PR”) Activities that create goodwill toward an individual, business, cause or product

Main Aims of PR To achieve favourable publicity about the business To build the image and reputation of the business and its products, particularly amongst customers To communicate effectively with customers and other stakeholders

Typical PR Activities Promoting new products Enhancing public awareness Projecting a business image Promote social responsibility Projecting business as a good employer Obtain favourable product reviews / recommendations

Sponsorship Sponsorship takes place when a payment for an event, person, organisation is given in return some consideration of benefit A specialised form of public relations Common in the worlds of arts and sport Sponsorship should benefit both sides

Direct Marketing Promotional material directed through mail, email or telephone to individual households or businesses

Why Use Direct Marketing? Allows a business to generate a specific response from targeted groups of customers Allows a business to focus on several marketing objectives: increasing sales to existing customers building customer loyalty re-establishing lapsed customer relationships generating new business

Direct marketing + / - Advantages Disadvantages Focus limited resources on targeted promotion Can personalise the marketing message Relatively easy to measure response & success Easy to test different marketing messages Cost-effective if customer database is well managed Response rates vary enormously Negative image of junk mail and email spam Databases expensive to maintain and keep accurate

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Promotion