1. Promotion

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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?

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

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

16. 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

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

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

19. 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

20. 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

21. 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

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

23. 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

24. 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 spam
Databases expensive to maintain and keep accurate

25. Test Your Understanding

26. Promotion