Chapter 19 What is Promotion ?. The Role of Promotion Promotion – is any form of communication a business organization uses to inform, persuade, or remind.

Chapter 19

What is Promotion?

The Role of Promotion

Promotion – is any form of communication a business organization uses to inform, persuade, or remind people about its products and improve its public image.Product Promotion – companies use this type of promotion to convince customers to buy products from them instead of their competitors.

Institutional Promotion

Institutional Promotion – is used to create a favorable image for itself. The purpose of this type of promotion is not to sell a specific product but to “sell” the company to potential consumers.

Four Types of Promotion

Advertising

Publicity

Sales Promotion and

Personal Selling

Advertising

Advertising – is any paid form of non-personal presentation of ideas, goods, or services by an identified sponsor. Advertising is identified by three features.

1. The time or space has been paid for

2. It uses a set format to carry the message rather than personal

3. It identifies the sponsor of the message.

Activity #1

Brainstorm and List all of the different forms of advertising.

Advantages of Advertising

Large numbers of people see the message (REACH)The cost per customer is lower than other types of promotionsBusinesses can choose the most appropriate media to reach their target market.Repeat viewing (FREQUENCY)Pre-selling of products

Disadvantages of Advertising

Cannot focus well on individual needsSome forms of advertising can be to expensive for some businesses.Adverting can be wasteful and inefficient because the people who see or hear the message are not part of the target market.Due to costs, ads must be brief.

Publicity

Publicity – involves placing newsworthy information about a company, product, or person in the media. Events such as groundbreaking ceremonies can be published in the newspaper.Principle function of Publicity – to build a favorable image.

Image

Image – the way that a business or organization is defined in people’s minds. Positive Publicity = Positive Image

Sponsoring events, concerts, art exhibits, awarding scholarships or prizes, donating land or money etc… (McDonalds with the Olympics)

Negative Publicity = Negative Image Accidents, unsafe products etc…

(FIRESTONE)

Advantages of Publicity

Advantages: Can Create a positive image Free The audience for news is huge Media is respected as a viable

source of information People are more likely to believe a

news story over an advertisement because the media is not biased.

Disadvantages of Publicity

Disadvantages: Company looses control over what

is said Company cannot choose the time

when the message is delivered. Negative Publicity can have

serious implications and seriously harm the image of the business.

Sales Promotion

Sales Promotion – involves all marketing activities other than personal selling, advertising, and publicity that are used to stimulate consumer purchasing and sales effectiveness. There are three characteristics of Sales Promotion: Short term activities (as opposed to

ads) Incentives to make a purchase Can be used by all channels of

distribution.

Consumer Oriented Promotions

1. Licensing – Manufacturers, movie makers, sports teams and celebrities may license for a fee their logo, trademark, characters, or personal endorsements to a business to be used in promoting the business’s products.

Visual Merchandising & Displays

Visual Merchandising – coordination of all of the physical elements in place of business so that it projects the right image to its consumers.

Displays – refers to the window, floor, counter and in-store display techniques.

Premiums and Incentives

Premiums – are low-cost items given away free to customers as a condition of purchase. Coupons Factory Packs – free gifts found inside the

package. Traffic Builders – low cost premiums such as pens,

key chains, calendars, which are given away to customers visiting a store or trying a product.

Coupon Plans – ongoing programs offering a variety of premiums in exchange for labels, coupons or other tokens from one or more purchases.

Incentives

Contests – require the participant to demonstrate a skill. Contest winners are awarded a prize.Sweepstakes – are games of chance.Rebates – are discounts offered by manufacturers to customers who purchase an item during a given time period.

Product Samples

Product Samples – is a free trial size of a product that is sent through the mail, distributed door-to-door, or through retail stores.

Advantages & Disadvantages of Sales

Promotions

Advantages : Each promotional device is unique & has

appeal to a potential customer. Gives to customer something of value Buying increases in the short – term Customers can have fun in the process

Disadvantages: Difficult to end without the customer

becoming disappointed that its over. Promotional efforts cannot make up for poor

products.

Personal Selling

Personal Selling – making an oral sales presentation to one or more potential buyers.Two types of Personal Selling: Order Taking (telephone) Order Getting (salespeople)

Adv. & Disadvantages of

Personal Selling

Advantages: Most flexible & individualized of the

promotional activities.

Disadvantages: Salespeople can only help one person

at a time Train the salespeople. The costs are higher than other types

of activities.

Promotional Mix

Promotional Mix – a combination of different types of promotion. Each type of promotion is designed to complement one another.