1. The Role of Promotion
Promotion- any form of communication a business or organization uses to inform, persuade, or remind people about its products and improve its public images.
Product promotion - used to convince potential customers to buy products from it instead of from a competitor.
Explains major features and benefits of its products
Tells where those products are sold
Advertises sales on those products
Answers customer questions
Introduces new products
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2. The Role of Promotion
Institutional Promotion- used to create a favorable image for itself. Does not directly sell a certain product. However, may ultimately result in increased sales of a company’s products.
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3. Four Types of Promotion
1. Advertising - any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.
Six Advantages of Advertising
1. A large number of people usually see the advertiser’s message
2. Costs per potential customer are usually lower than other forms of promotion
3. Can choose the most appropriate media to reach target mkt
4. Can control the content of an advertisement
5. Ads are subject to repeat viewing
Ads can “presale” products
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4. Four Types of Promotion
Four Disadvantages of Advertising
1. Cannot focus well on individual needs
2. Some forms of advertising can be too expensive for many businesses
3. Sometimes advertising is wasteful and inefficient - message may be spent on non-potential customers
4. Advertising must be brief
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5. Four Types of Promotion
2. Publicity - placing newsworthy information about a company, product, or person in the media. Can be used to promote particular events and promote particular products. The main purpose of publicity is to build an image. Image - the way a business or organization is defined in people’s minds.
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6. Four Types of Promotion
Advantages of Publicity
Publicity is free; advertising is not
Can be used to create a positive image within the community
Viewed as being more credible or believable than advertising
Viewed as news, people more attention to publicity
Disadvantages of Publicity
Give up much of your control of your message
Not all publicity is positive
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7. Four Types of Promotion
3. Sales Promotion - All marketing activities, other than personal selling, advertising, and publicity, that are used to stimulate consumer purchasing and sales effectiveness.
Objectives of Sales Promotion
Increase sales
Inform customers about new products
Create a positive store or corporate image
3 Characteristics
Short term activities
Offers some type of incentive
Can be successfully used in all channels of distribution
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8. Four Types of Promotion
Sales promotion can be either consumer or trade oriented
Trade Promotions - sales promotion activities designed to gain manufacturers’, wholesalers’, and retailers’ support for a product. More money is spent on promoting to businesses than to consumers.
1. Slotting allowances - a cash premium paid by the manufacture to a retail chain for the costs involved in placing a new product on its shelves.
2. Buying allowances - special price discount given by manufacturers to wholesalers and retailers to encourage them to either buy a product or buy a larger quantity.
3. Trade Shows and Conventions - designed to reach wholesalers
4. Sales incentives - awards given managers and employees who successfully meet or exceed their company’s set sales quota.
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9. Four Types of Promotion
Consumer Sales Promotions - designed to encourage customers to buy a product.
1. Licensing - Organizations, such as manufactures, movie makers, sports teams, and celebrities, may license for a fee their logo, trademark, trade characters, names and likenesses, or personal endorsements to a business to be used in promoting the business’s products.
2. Promotional tie-ins - involve sales promotional arrangements between one or more retailers or manufacturers. They combine their resources (advertising and sales promotional activities) to do a promotion that creates additional sales for each partner.
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10. Four Types of Promotion
3. Visual Merchandising and Displays -
Visual Merchandising - the coordination of all physical elements in a place of business so that it projects the right image to its customers
Displays - visual and artistic aspects of presenting a product to a target group of customers.
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11. Four Types of Promotion
4. Premium and Incentives - most popular and frequently used sales promotion type
Premiums - low cost items given away free to consumers as a condition of purchase.
Coupons - certificates given to customers entitling cash discounts
Factory Packs (in-packs)- free gifts placed in product packages
Traffic Builders - low cost premiums like key chains, pens
Coupon Plans - ongoing programs in exchange for labels, coupons, or other tokens from one or more purchases
Incentives - higher-priced products given in contests or sweepstakes
5. Product Samples - free trial size of a product that is sent through the mail, distributed door-to-door, or through retail stores and trade shows
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12. Four Types of Promotion
Advantages of Sales Promotions
Unique and has special appeal to a potential customer
Helps build customer loyalty
Disadvantages of Sales Promotions
Difficult to end without the customers becoming dissatisfied
Store image and sales can suffer if the promotion is not properly planned and managed
Only designed to supplement other promotional efforts and cannot make up for poor products
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13. Four Types of Promotion
4. Personal Selling - making an oral sales presentation to one or more potential buyers. On a per contact basis, personal selling is the most expensive form of promotion.
Order-taking personnel - cashiers, counter clerks, and sales associates, perform routine tasks.
Order-getting personnel - professional salespeople, are more involved in informing customers and helping them to buy. Usually sell big ticket items like real estate, cars, appliances, and industrial goods
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14. Four Types of Promotion
Promotional Mix - a combination of different types of promotion. A business decides on a promotional mix that will be most effective in persuading customers or other businesses to purchase and support the business’s products.
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15. Promotional Mix Factors affecting the selection of a promotional mix
Good, Service, or Idea
Type of product
Product nature
Stage of life cycle
Product’s market
Type of consumer
Number of Consumers
Geographical location
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16. Promotional Mix Distribution System Product’s Company Competition
Historical perspective
Available funds
Size of sales force
Competition
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17. Publicity and Public Relations
Publicity - Placing newsworthy information about a company, product, or person in the media.
Advantages
Free to the business
Seen as more credible than advertising
Disadvantages
Lack of control by the business - bad stories can get printed
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18. Publicity and Public Relations
Public Relations - any activity designed to create goodwill toward a business.
Benefits of PR
Increasing sales
Increasing firm’s good reputation
Increasing customers reception of advertising messages
Spreading accurate information to the public
Conditioning customers to expect quality products from the company
Reducing the impact of problems
Helping to obtain better treatment from government
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19. Audiences for PR Internal Audiences - groups within the organization
Employee Relations - goal is to keep your employees happy by using:
Tuition reimbursement
Newsletters
Health and wellness programs
Opportunities for communications
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20. Audiences for PR External Audiences - groups outside the organization
Customers - Satisfied customers = repeat business. Ways to keep customers happy include:
Provide special services and amenities such as gift-wrapping, check cashing, free delivery, free parking, etc.
Advisory boards - panels of consumers that make suggestions about products and businesses
Customer newsletters, annual reports
Customer events - seminars, lunches, entertainment
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21. Audiences for PR
Community - company sponsors activities that benefit the civic, social, and cultural life of the community. Activities can include:
School partnerships - HP donating computers to the high school
Sponsorship of community events
Scholarships
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22. Public Relations
News Release - a pre-written story about the company that is sent to various media for publication. It usually contains information about the company’s employees, stores, operations, products, corporate philosophy, or participation in an event or program. Can contain hard or soft news.
Hard News - information that should be announced right away because the public will want to know about it immediately
Soft News - information that does not need to be announced immediately because it will be of as much interest to the public later as it is now
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23. Purposes of News Releases
To introduce new products
To keep the business in the public eye
To position the business’s image
To support good employee relations
To create good community relations
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24. Getting Your News Release in the Media
Include a captioned photograph with the release
Meet media deadlines
Write an appropriate number of releases
Direct the release to a specific person
Advise the staff that you have sent out a release
Reread the release after setting it aside
Keep a copy of every release
Send a cover letter with the release
Send a thank-you note after the release is used
Avoid pressuring the editor
Avoid mentioning publicity or advertising
Avoid playing favorites
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25. Public Relations
Press Kit - a folder containing articles, news releases, feature stories, and photographs about a company, product, or person. Press kits are given to the media to assist them in reporting on the intended news item.
Press Conference - a meeting in which media members are invited by the business or organization to hear an announcement about a newsworthy event.
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