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:
Advertising
• non-personal
communication transmitted through mass media
Publicity
• free
promotion through news stories in newsletters, newspapers, magazines and
television
Sales Promotion
• 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
• Seminars
• Newsletters
• Contests
• Flyers
• 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."
Promotion
Objectives
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
Promotional
Strategy
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?
One thing I've found is that promotion is
invariably and inescapably tied into any business venture or product, whether
intentional or not.
I was teaching a marketing class and I asked
that question to my students: Does your business do promotions? Several of the
small business owners said they did not.
So we took a look at what they were doing. A
bagel shop owner who said they didn't do any promotions had several in fact
that he didn't realize were promotions: a large sign in front of his shop, his
name printed on the sides of his take-out bags and the frequent discussions he
and his employees had with friends and neighbors!
A contracting consultant promoted his business
through lunches with contractors, attending various builder luncheons,
one-on-one visits to job sites, the signs he put out on the job sites he worked
on, etc.
So in fact, many of them were doing promotions
even if it wasn't an advertisement.
The reason is clear: even if you are a local,
small business, people won't purchase what you're selling unless they know
about it. Even if that is as small as a listing in the yellow pages, promotions
are key to generating awareness of who you are and what you're selling.
How much more effective, then, would it be to
take control of that awareness generation effort so you can be effective as
possible for the least expense? Sounds like a reason to pay a good marketing
manager the big bucks!
·
Past tense
1.
Customers
need to know about a great product and be persuaded to buy .
2.
consultant promoted his business through
lunches with contractors
3.
What
are the costs of the promotion compared to the benefits
4.
Criteria
used to measure success
5.
Sales promotion is designed
6.
non-personal
communication transmitted through mass media
7.
that can later be exchanged for money
8.
discounts based on the spending
9.
clearly
stated and measurable
10.
the
producer has reviewed all the possible promotional tools
·
Present tense
1.
Sales promotion is the process of persuading a potential customer to buy the product
2.
customers
are aware of the existence and positioning of products
3.
will the resulting sales boost justify the investment
4.
what you're selling unless they know about it
5.
a listing in the yellow pages
6.
promotions are key to generating awareness
7.
A contracting consultant
8.
I was teaching a marketing class
9.
promotional
strategy should address the following issues
10.
When undertaking a sales promotion
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