Promotion

4P's of Marketing

• 1. Product

  2. Price

  3. Place

  4. Promotion

Whether it is a need or a want, companies are spending time and money to come up with innovative methods of reaching consumers. Below represents global marketing spending from 2012-2018. Note, this does not necessarily factor in in-house marketing, free platform software or social media tools, and small businesses who may not have reported their efforts. It is the goal of marketers to inform you about what is possible and to create justification for why you need it.

In this section we will cover the major types of promotion used by companies to inform, promote goodwill, and to get consumers purchasing your product/service.

Promotion is an attempt by marketers to inform, persuade, or remind consumers and business to business (B2B) users to influence their opinion or elicit a response. Most businesses use some form of promotion and their promotional strategies will vary based on the company, customer segment, and intent.

The goal of any promotion is to stimulate action from the people or organizations of a target market. In a profit-oriented firm, the desired action is for the consumer to buy the promoted item. Not-for-profit organizations seek a variety of actions with their promotions. They may ask us not to litter, to buckle up, to join the military, to support performing arts, or to donate money to help against the cruelty to animals or to feed starving children around the world. Regardless of whether it is for profit or a nonprofit, any promotional campaign may seek to achieve one or more of these goals.

Promotional goals (objectives):

• • Creating awareness

  • Getting people to try products

  • Providing information

  • Retaining loyal customers

  • Increasing the use of products

  • Identifying potential customers

  • Teaching potential customers

Creating awareness:

All too often, firms go out of business because people don’t know they exist or what they do. Small restaurants often have this problem. Simply putting up a sign and opening the door is rarely enough. Promotion through ads on social media platforms and local radio or television, coupons in local papers, flyers, and so forth can create awareness of a new business or product.

Large companies often use catchy slogans to build brand awareness. For example, Dodge’s wildly successful ads where a guy in a truck yells over to another truck at a stoplight, “Hey, that thing got a Hemi?” has created a huge number of new customers for Dodge trucks. Hemi has become a brand within a brand. Now, Chrysler is extending the Hemi engine to the Jeep brand, hoping for the same success.

Getting consumers to try products:

Promotion is almost always used to get people to try a new product or to get nonusers to try an existing product. Sometimes free samples are given away. Lever, for instance, mailed over two million free samples of its Lever 2000 soap to targeted households. Coupons and trial-size containers of products are also common tactics used to tempt people to try a product. Celebrities are also used to get people to try products. Oprah Winfrey, for example, recently partnered with Kraft Heinz to launch a new line of refrigerated soups and side dishes made with no artificial flavors or dyes. Kate Murphy, director of strategic partnerships at the social marketing platform Crowdtap, weighed in on the strategy. “Celebrity endorsements can provide immense value to a product/brand when done right,” Murphy said. “If a celebrity aligns with a product, they bring a level of trust and familiarity to the table.”

Providing information:

Informative promotion is more common in the early stages of the product life cycle. An informative promotion may explain what ingredients (for example, fiber) will do for a consumer’s health, describe why the product is better (for example, high-definition television versus regular television), inform the customer of a new low price, or explain where the item may be purchased.

People typically will not buy a product or support a not-for-profit organization until they know what it will do and how it may benefit them. Thus, an informative ad may stimulate interest in a product. Consumer watchdogs and social critics applaud the informative function of promotion because it helps consumers make more intelligent purchase decisions. StarKist, for instance, lets customers know that its tuna is caught in dolphin-safe nets.

Keeping loyal customers:

Promotion is also used to keep people from switching brands. Slogans such as Campbell’s soups are “M’m! M’m! Good!” and “Intel Inside” remind consumers about the brand. Marketers also remind users that the brand is better than the competition. For years, Pepsi has claimed it has the taste that consumers prefer. Southwest Airlines brags that customers’ bags fly free. Such advertising reminds customers about the quality of the product or service.

Firms can also help keep customers loyal by telling them when a product or service is improved. Domino’s recently aired candid advertisements about the quality of their product and completely revamped their delivery operations to improve their service. This included advertisements highlighting a Domino’s pizza being delivered by reindeer in Japan and by drone in New Zealand. According to University of Maryland marketing professor Roland Rust, “delivery” stands out in how Domino’s has broadly improved its quality, and “the customized delivery vehicles are a competitive advantage.”

Increasing the amount and frequency of use:

Promotion is often used to get people to use more of a product and to use it more often. The National Cattlemen’s Beef Association reminds Americans to “Eat More Beef.” The most popular promotion to increase the use of a product may be frequent-flyer or -user programs. The Marriott Rewards program awards points for each dollar spent at a Marriott property. At the Platinum level, members receive a guaranteed room, an upgrade to the property’s finest available accommodations, access to the concierge lounge, a free breakfast, free local phone calls, and a variety of other goodies.

Identifying target customers:

Promotion helps find customers. One way to do this is to list a website as part of the promotion. For instance, promotions in The Wall Street Journal and Bloomberg Businessweek regularly include web addresses for more information on computer systems, corporate jets, color copiers, and other types of business equipment to help target those who are truly interested. Fidelity Investments ads trumpet, “Solid investment opportunities are out there,” and then direct consumers to go to http://www.fidelity.com. A full-page ad in The Wall Street Journal for Sprint unlimited wireless service invites potential customers to visit http://www.sprint.com. These websites typically will ask for your e-mail address when you seek additional information.

Teaching the customer:

For service products, it is often imperative to actually teach the potential client the reasons for certain parts of a service. In services, the service providers work with customers to perform the service. This is called “co-creation.” For example, an engineer will need to spend extensive time with team members from a client company and actually teach the team members what the design process will be, how the interaction of getting information for the design will work, and at what points each part of the service will be delivered so that ongoing changes can be made to the design. For services products, this is more involved than just providing information—it is actually teaching the client.

Types of Promotion

Once we have determined our promotional goal, we need to determine our promotional strategy or mix of specific promotion types. Each of these delivers the organization's message in a different way: reaching different parts of the buying public at different points in the buying process. Though there are thousands or millions of different ways to combine them in your promotional campaign, almost every campaign uses one or more of just eight different promotional types:

• • advertising

  • direct marketing

  • personal selling

  • public relations

  • sponsorship

  • sales promotion

  • digital/social media

  • e-commerce

1. Advertising

One of the key factors in the promotional mix, which contributes to brand building and also how the market perceives the company, is advertising. It is always a big part of the promotional mix because of the far and wide reach of advertising and the message that you can send to your existing and potential customers. Good advertising can build a solid brand for the company. On the other hand, bad advertising with a wrong message, can cause the brand or product to fail.

2. Direct Marketing

While advertising targets a mass-audience, direct marketing targets prospects and customers. Social media marketing, Email marketing, Internet marketing are all types of direct marketing used by companies. They have become important in the promotional mix lately because people are using internet far more than they used to a decade back. Company’s employ direct marketing in order to engage in one-way communication with its customers, about product announcements, special promotions, order confirmations as well as customer inquiries.

3. Personal Selling

Think About It

• Read: Common Personal Selling Techniques

  • List the nine (9) different types of personal selling.

  • Give an example of a business or time you experienced each of the nine.

  • List the advantages and disadvantages of personal selling.

4. Public Relations/Publicity (click to read)

Think About It

• • What is the main objective of public relations?

  • How is public relations different from advertising?

  • What are the seven different types of public relations?

  • What are the advantages of public relations?

  • What are the disadvantages of public relations?

5. Sponsorship

Think About It

• Read: 10 Reasons to Sponsor and Event

  • List all ten reasons why businesses should sponsor an event

  • Pick two (2) reasons you found interesting and explain why.

• Read: 10 Types of Sponsorship Packages

  • Pick your top two favorites from the list and give an actual example of a company doing the specific sponsorship. What did they do and was it successful? (Do not use the examples provided)

• Read: 17 Creative Event Sponsorship Ideas

  • Pick your top three favorites from the list and give an actual example of a company doing the specific sponsorship. What did they do and was it successful? (Do not use the examples provided)

6. Sales Promotion (Click to read article 1, Click to read article 2, Click to read article 3)

Think About It

• • Read all three (3) articles: list all of the sales promotions listed in both articles

  • Choose five (5) of the different sales promotions and give an actual example of each sales promotion (find a business that used that type of promotion).

7. Digital/Social Media

Think About It

• Read: Social Media Marketing - The Ultimate Guide

  • Social media marketing is all about meeting your ___________________ and ____________________ where they are and as they _________________ _________________ with each other and your brand.

  • What are the benefits of social media marketing?

  • What are the 5 steps towards creating a social media marketing strategy?

  • What are social media metrics and what purpose do they serve?

8. E-commerce

The use of a company’s website to generate sales through online ordering, information, interactive components such as games, and other elements of the website. Website development is mandatory is today’s business world. Understanding how to develop and utilize a website to generate sales is imperative for any marketer.

Steps in creating your Promotions/Promotional Mix

A Promotional Mix is a combination of more than one type of promotion with a similar message to reach your desired target market. While establishing your own promotional mix, you need to consider and decide upon several factors:

• • Determine your target market (customer segment)

  • Determine your objective (what is your expected outcome - SMART goals)

  • Design your message in terms of content, format, and engagement

  • Determine your budget (consider ROI)

  • Determine your promotional mix (e.g. advertising, direct marketing, etc.)

  • Select your promotional channels (e.g. online, social media, email, website, events, flash mob, traditional advertising)

  • Based on your target market, when and where are the best times to promote your product?

  • Measure the results of the implemented program and make the necessary adjustments as needed

Sales are Bad, but often Necessary

Sales can often be the broken crutch to stand on; it might help, but ultimately might be your downfall (pun intended). When we have too many sales, it often trains customers to look for sales and, sadly, devalue our product. Customers are likely to browse, but will wait for the next sale or coupon (think Macy's). When you rarely have sales, people will purchase products or services as needed because timing may be an issue (e.g. customers need it soon - Halloween, businesses may run out of stock/availability - limited edition, they never have a sale anyway and I want it).

Here are some of the important questions that you should ask yourself when you are setting the product price:

• • How much did it cost you to produce the product?

  • What is the customers perceived product value?

  • Do you think that the slight price decrease could significantly increase your market share?

  • Can the current price of the product keep up with the price of the product’s competitors?

  • What is the profit margin you would like per product/service?

  • Are you attempting to get rid of stock to open up for new merchandise?

  • What is the breakeven point of the entire product line (units x cost)? How many sales would I need to pay off that cost?

  • What is the minimum profit margin I am willing to accept for the entire product line? (e.g. If I paid $500 for 50 shirts, how much profit do I want to make on the entire line?)

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• • https://opentextbc.ca/businessopenstax/chapter/promotion-strategy/

  • https://blog.ideacafe.com/7-types-promotion

  • https://www.marketing91.com/promotional-mix/

  • https://www.feedough.com/what-is-public-relations-pr-functions-types-examples/

  • https://chrismaloney.files.wordpress.com/2010/04/diffusion-of-innovation-adoption-curve.jpg

    • https://alexrister1.files.wordpress.com/2012/02/klout-influence-matrix-902x1024.jpg