1. What is promotion ?
It is no longer enough for a business to have great products. Lots of businesses have those too. Customers need to know about a great product and be persuaded to buy. That is the role of promotion.
Promotion is all about communication. Why because promotion is the way in a business makes its products known to the customers, both current and potential.
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.
It is a common mistake to believe that promotion by business is all about advertising. It isn’t. There are a variety of approaches that a business can take to get their message across to customers, although advertising is certainly an important one.
It is important to understand that a business will use more than one method of promotion. The variety of promotional methods used is referred to as the promotional mix.
2. What is sales promotion
Sales promotion is the process of persuading a potential customer to buy the product. Sales promotion is designed to be used as a short-term tactic to boost sales – it is not really designed to build long-term customer loyalty.
Some sales promotions are aimed at consumers. Others are target at intermediaries (such as agents and wholesalers) or at the firm’s sales force.
When undertaking a sales promotion, there are several factors that a business must take into account:
- What does the promotion cost – will the resulting sales boost justify the investment?
- Is the sales promotion consistent with the brand image? A promotion that heavily discounts a product with a premium price might do some long-term damage to a brand
- Will the sales promotion attract customers who will continue to buy the product once the promotion ends, or will it simply attract those customers who are always on the look-out for a bargain?
There are many methods of sales promotion, including:
- Money off coupons – customers receive coupons, or cut coupons out of newspapers or a products packaging that enables them to buy the product next time at a reduced price
- Competitions – buying the product will allow the customer to take part in a chance to win a prize
- Discount vouchers – a voucher (like a money off coupon)
- Free gifts – a free product when buy another product
- Point of sale materials – e.g. posters, display stands – ways of presenting the product in its best way or show the customer that the product is there.
- Loyalty cards – e.g. Nectar and Air Miles; where customers earn points for buying certain goods or shopping at certain retailers – that can later be exchanged for money, goods or other offers
Loyalty cards have recently become an important form of sales promotion. They encourage the customer to return to the retailer by giving them discounts based on the spending from a previous visit. Loyalty cards can offset the discounts they offer by making more sales and persuading the customer to come back. They also provide information about the shopping habits of customers – where do they shop, when and what do they buy? This is very valuable marketing research and can be used in the planning process for new and existing products.
3. Kind of promotion
Promotion includes all activities designed to inform, persuade and influence people when they are making the decision to buy. Promotion is made up of:
• non-personal communication transmitted through mass media
• free promotion through news stories in newsletters, newspapers, magazines and television
• all forms of communication not found in advertising and personal selling, including direct mail, coupons, volume discounts, sampling, rebates, demonstrations, exhibits, sweepstakes, trade allowances, samples and point-ofpurchase displays In designing a promotional plan, clearly spell out:
• Which objectives to use. It is possible to have more than one objective, but it is recommended that a company target its audience or run the risk of losing focus.
• What to say
• Who to say it to
• Criteria used to measure success
Suggestions for Inexpensive Promotion
Some inexpensive, appropriate and effective methods of promotion for the new food processor include advertising through:
• Personal selling
• Product demonstrations
• Direct mail
• Business cards
• Yellow Page listing
• Statement stuffers
• Window banners
• Greeting cards
• Sports team sponsor
• Home parties
• Ethnic services—languages spoken
Of course, one of the best free methods of promotion is good “word of mouth."
The promotion objectives need to be clearly stated and measurable. They must be compatible with the objectives of the company, as well as the competitive and marketing strategies. Objectives vary for different products and different situations. For example, producers must promote differently to brokers than to wholesalers. When promoting to a broker, the producer must promote what he/she wishes the broker to present to the wholesaler. When promoting to a wholesaler, the producer simply wants the wholesaler
to purchase the product. There are five general promotional objectives to choose from. The five types of objectives for promotional activities are1:
• to provide information
• to increase demand
• to differentiate the product
• to accentuate the value of the product
• to stabilize sales
Once the producer has reviewed all the possible promotional tools, he/she must devise a promotional strategy.
promotional strategy should address the following issues:
• What is the goal of the promotion?
• What types of promotion should be used?
• What effect should the promotion have on the customer?
• Which promotion is working?
• What are the costs of the promotion compared to the benefits?
4. Why do we need promotion?
Customers need to know about a great product and be persuaded to buy .
What are the costs of the promotion compared to the benefits
Criteria used to measure success
Sales promotion is designed
non-personal communication transmitted through mass media
that can later be exchanged for money
discounts based on the spending
clearly stated and measurable
the producer has reviewed all the possible promotional tools
Sales promotion is the process of persuading a potential customer to buy the product
customers are aware of the existence and positioning of products
will the resulting sales boost justify the investment
promotional strategy should address the following issues
When undertaking a sales promotion