Marketing 4.01B Explain the types of promotion

Product Promotion  The specific goal of product promotion is to persuade customers to buy a particular good or service  It is used to stimulate purchases of goods and services  Create awareness of a good or service  Inform customers about product features  Encourage interest in and inquiries about a good or service  Inform customers where a product can be purchased  Build a reputation for a product  Create excitement and motivate retailers and salespeople

Types of Product Promotion  Primary: aims to stimulate demand or desire for an entire class or goods or services  Emphasis is on the product and its uses, rather than on a particular brand  Ex: TV ads for beef or pork normally come from the Cattleman’s Beef Board or the National Pork Board. They are not pushing a brand, just the competition between the two industries

Types of Product Promotion  Secondary: also called selective product promotion, is used to stimulate demand for a specific brand of a product.  Ex: Borden, Inc. advertises to promote its brand of milk, assuming the American Dairy Association and Dairy Council promotion is stimulating primary demand for milk  Doritos Commercial Doritos Commercial  Doritos 2 Doritos 2  Maybelline Maybelline

Institutional Promotion  Also known as corporate promotion, institutional promotion does not attempt to sell a good or service.  Primary goal is to create a certain image of the company in the customers’ eyes  Accomplished by informing customers about the company, its ideas, and its philosophy  Military commercial Military commercial  Dove Evolution Dove Evolution  Livestrong Livestrong

Types of Institutional Promotion  Public Service: inform customers about noncontroversial issues that are in the public’s best interest  Ex: community drug prevention or after school participation in sports  Public Relations: created to deal with issues that are in the public’s interest but are also related to the company or its products  Can be proactive (business promotes itself) or reactive (business engages in the activities in response to an external situation)  Patronage: designed to promote a firm’s prestige or its features

Uses of Institutional Promotion  Change a particular attitude toward a firm or its products  Tobacco companies working with QuitAssist programs  Inform customers of the company’s interest in social or environmental issues  IBM’s membership in the Wildlife Habitat Council  Inform the public about the company’s future

Uses of Institutional Promotion  Inform customers of the company’s name and its type of business  Show the company’s commitment to quality, technology, or research  Enhance company morale and recruit new employees  Build or reinforce a favorable company image  Coca-Cola’s $5 million donation of bottled water to New Orleans in 2005

Advantages of promotional activities  Contributes to the economy and society  Supports mass media  Benefits companies  Encourages higher standard of living

Disadvantages of promotional activities  Can be deceptive  Can be manipulative  Can be offensive  Can create/reinforce stereotypes (women, minorities)  Can play upon fears  Personal-hygiene products  Has limited abilities  Cannot make up for poor quality or a good service  Immediately achieve major success for a company or its products  Substitute for salespeople who are talented and well trained