Types of Promotion!

Product Promotion – this method of promotion tries to convince consumers to select their goods or services rather than the competitor.

Institutional Promotion – the company is the focus of the promotion instead of products. (public service, public relations, patronage)

Product Promotion Primary – emphasis on the product and it uses (not on a particular brand) Secondary – emphasis on creating demand for a specific brand.

Institutional Promotion Public Service – informs the public on issues that are normally considered to be in the general best interest of the community at large. Public Relations – provides a service for a company by helping give the public and the media a better understanding of how the company works. Patronage – continued support, loyalty, and repeat business of customers.

Uses of Institutional Promotion To change a particular attitude toward a firm or its products. (For example: Phillip Morris – tobacco) Inform the customers of the company’s interest in social or environmental issues (i.e. IBM has a written environmental affairs policy and participates in many voluntary initiatives) Inform the public of the company’s future (i.e. when Verizon bought Alltel in 2009, a new promotional campaign to announce the change).

Uses of Institutional Promotion Inform customers of the company’s name and its type of business (During the growth stage of the internet, travel websites were born and promoted to inform the customers about their services). Show the company’s commitment to quality, technology, or research (GSK performs lots of research using top notch technology) Enhance company morale and recruit new employees (recruiting events) Build or reinforce a favorable company image (Coca Cola’s donation of bottled water and other beverages to New Orleans in This builds a positive company image.

Advantages of Promotional Activities Contribute to economic growth and business activity Support the mass communication media Companies benefit directly because these activities raise our standard of living and make us better educated customers. Creates jobs due to the need to mass produce products based on customer demand Encourages customers to purchase a NEW and IMPROVED products.

Disadvantages of promotional activities They can be deceptive, manipulative, and play on customer’s fears. They can be offensive and reinforce stereotypes. They have limited abilities: – Product promotion doesn’t add value to goods and services. – Institutional promotion can be costly and difficult to measure – Promotion cannot make up for poor quality products. – Promotion cannot substitute for well-trained sales staff. – Promotion cannot achieve major success.

The Uses of Product Promotion Create consumer awareness of a good or service Informs customers about product features Encourages interest in and inquiries about a good or service Informs consumers where a product can be purchased Builds a reputation for a product Creates excitement and motivates retailers and salespeople.

Activity Group Activity – Find 3 examples of product promotion and institutional promotion using the internet or magazines. Attach these pictures to plain paper and label each picture. Product promotion pictures should be labeled as primary or secondary.