Promotional Concepts and Strategies

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Chapter 17

• Promotional Concepts and Strategies

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Sec 17.1 Promotion and Promotional Mix

• Promotion is persuasive communication
• companies rely on promotion to inform people
  about their products and services
• companies use promotional techniques to enhance
  their public image and reputation and persuade
  people that their products are valuable
• goals of promotional activities is summerized by
  the phrase AIDA

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AIDA

• Attract Attention to product
• Build Interest in product
• Create Desire for product
• Ask for Action

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Product Promotion

• businesses use product promotion to convince
  prospects to select its products or services
  instead of a competitors brands
• explains
• major features and benefits of the product or
  service
• where it is sold
• advertise sales
• introduce new offerings

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• product promotion also helps companies foster
  good relations with existing customers, thereby
  enhancing their loyalty

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Institutional Promotion

• used to create a favorable image for a business
• help the business advocate for change
• take a stand on trade or community issues
• do not directly sell a product or service
  these activities do foster a favorable image for
  the company

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Types of Promotion in the Promotional Mix

• Five basic categories
• Personal selling
• Advertising
• Direct marketing
• Sales promotions
• Public relations

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Personal Selling

• requires that a company employ sales
  representatives who generate and maintain direct
  contact with prospects and customers
• one of costliest forms of promotion
• direct contact can take the form of personal
  meetings, telemarketing, email contact, and
  correspondence
• typically takes place after or result of other
  promotional activities

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Advertising

• form of non-personal promotion
• with advertising, a company engages in a one-way
  communication to the prospect
• companies pay to promote ideas, goods, services
  in a variety of media outlets
• advertising found everywhere, radio, magazines,
  newspapers, television, Web sites, gymnasiums,
  professional team venues, buses, and billboards

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Direct Marketing

• type of advertising directed to a targeted group
  of prospects and customers rather than a mass
  audience
• printed direct mail sent via regular mail to a
  home or business
• electronic direct mail
• Goals of direct marketing are to generate sales
  leads for sales representatives to pursue

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Sales Promotion

• Represents all marketing activities other than
  personal selling, advertising, and public
  relations that are used to stimulate purchasing
  and sales
• - objectives of sales promotion are to increase
  sales, inform potential customers about new
  products, and create a positive business or
  corporate image

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Public Relations

• activities that enable an organization to
  influence a target audience
• often public relations campaigns try to create a
  favorable image for a company, its products, or
  its policies
• one of the goals of a public relations program is
  to cultivate media relations with reporters who
  cover a specific industry

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Writing News Releases

• although there are many media tools, one of the
  most important ones is the news release
• a news release is an announcement sent to the
  appropriate media outlets.
• a release announces newsworthy developments
  about a companies products or services,
  distribution channels, facilities and operations,
  revenues and earnings partners, employees, and
  events

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Publicity

• involves bringing news or newsworthy information
  about an organization to the publics attention
• this process is known as placement
• can be launched to achieve various goals, main
  function is to develop a positive perception or
  awareness of the organization in the marketplace
• negative publicity can devastate a company or
  organization

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Concept of Promotional Mix

• Promotional Mix is a combination of strategies
  and cost effective allocation of resources
• - most companies use more than one type of
  promotion to achieve their promotional goals
• - a business establishes a promotional mix by
  following a series of steps that range from
  identifying the target market to measuring the
  results

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• - the strategies of the mix are designed to
  complement one another
• - advertising and direct marketing create
  awareness of a businesss product
• - public relations hrlps cultivate a favorable
  image and brand recognition
• sales promotion activities stimulate sales,
  reinforce advertising, and support selling
  efforts
• - personal selling builds on all of these
  previous efforts by completing the sale

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• Elements of the promotional mix must be
  coordinated
• - ie. national advertising should be reinforced
  by local promotional efforts
• when promoted products are not available as
  advertised or when the sales staff is uninformed
  about a promotion, sales are lost and customers
  are dissatisfied

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Promotional Budget

• In large companies, the marketing department
  determines
• the promotional mix
• establishes the budget
• allocates resources
• coordinates the campaign
• supervises any outside resources
• measures the results

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• No precise way to measure the exact results of
  spending promotional dollars
• Often the promotional budget is a percentage of
  sales

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Push-Pull Concept

• Manufacturers often develop a promotional mix
  for each segment of the distribution channel
• Push Policy - to promote a product to large
  retailers that sells its products, a manufacturer
  might want to use a mix of personal selling,
  advertising, and buying discounts
• this type of promotion is used only with the
  next partner in the distribution channel the
  manufacturer pushes the product to the retailer

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• Pull-Policy directs promotion toward the
  consumers
• the same manufacturer might use a different
  promotional mix of local and national
  advertising, in-store displays, sales promotion,
  and public relations to reach consumers
• the pull policy directs promotion towards
  consumers and is designed to create consumer
  interest and demand
• consumer demand can pull or encourage
  retailers to carry the product being promoted
• advertising geared to consumers, in addition
  to premiums, samples, and demonstrations