LECTURE 8 Promotion

It is no longer enough for a business to have great products. Customers need to know about a great product and be persuaded to buy. That is the role of promotion. 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.

 It is a common mistake to believe that promotion by business is all about advertising. It isn’t.  There are a variety of approaches that a business can take to get their message across to customers, although advertising is certainly an important one.  It is important to understand that a business will use more than one method of promotion.  The variety of promotional methods used is referred to as the promotional mix.

Promotional Mix  Components of Promotion Mix  There are seven main elements in a promotional mix. They are: 1. Advertising - Any paid form of non-personal communication through mass media about a service or product is called advertising.  It is done through non personal channels or media. Print advertisements, advertisements in Television, Radio, Billboard, Brochures and Catalogues, Direct mails, In-store display, motion pictures, s, banner ads, web pages, posters are some of the examples of advertising.

 2. Personal Selling - This is a process by which a person persuades the buyer to accept a product or a point of view or convince the buyer to take specific course of action through face to face contact.  It is an act of helping and persuading through the use of oral presentation of products or services.  Target audience may vary from product to product and situation to situation. In other words personal selling is a person to person process by which the seller learns about the prospective buyer's wants and seeks to satisfy them by making a sale. Examples: sales presentations, and telemarketing etc. It can be of face-to-face or through telephone contact.

 3. Publicity : Unlike advertising, this form of promotion is not paid for by the sponsor. Thus, publicity is news carried in the mass media about an organization, its products, policies, actions, personnel etc.  It can originate with the media or the marketer, and is published or broadcast at no charge for media space and time.  Examples: Magazine and Newspaper articles/reports, radio and television presentations, charitable contributions, speeches. Publicity can be favorable (positive) or unfavorable (Negative). The message is in the hands of media and not controlled by the organization/firm.

 4. Sales promotion - is any activity that offers an incentive for a limited period to obtain a desired response from the target audience which includes wholesalers and retailers. It stimulates consumer demand, market demand and improve product availability. Examples: Contests, product samples & Coupons.

 5 Corporate image - It is important to create a good image in the sight of general public as the Image of an organization is a crucial point in marketing. If the reputation of a company is bad, consumers are less willing to buy a product from this company as they would have been, if the company had a good image.

 6 Exhibitions: Exhibitions provide a chance to try the product by the customers. It is an avenue for the producers to get an instant response from the potential consumers of the products.  7 Direct Marketing is reaching the customer without using the traditional channels of advertising such as radio, newspaper, television etc. This type of marketing reach the targeted consumers with techniques such as promotional letters, street advertising, catalogue distribution etc.

Main aims of promotion Promotional activities have a variety of aims:  To inform current and potential customers about the existence of products  To explain the potential benefits of using the product  To persuade customers to buy the product  To help differentiate a product from the competition  To develop and sustain a brand  To reassure customers that they have made the right choice

Promotional methods – “above and below the line”  The way in which promotion is targeted is traditionally split into two types:  Above the line promotion – paid for communication in the independent media e.g. advertising on TV or in the newspapers. Though it can be targeted, it could be seen by anyone outside the target audience. Advertising is the main methods of above-the-line promotion.  Below the line promotion – promotional activities where the business has direct control e.g. direct mailing and money off coupons. It is aimed directly at the target audience.

Approaches to setting the budget Promotional Budget

Method (1) Fixed percentage of sales  In markets with a stable, predictable sales pattern, some companies set their advertising spending consistently at a fixed percentage of sales.  This policy has the advantage of avoiding an “advertising war” which could be bad news for profits.

Method (2) Same level as competitors  This approach has widespread use when products are well-established with predictable sales patterns.  It is based on the assumption that there is an “industry average” spending that works well for all major players in a market.

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