Transcript 6. Promotion Strategy

5. Promotion Strategy
MKT5
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What is promotion?
► An
organization communicating with
customers
► A business’ total communications program is
referred to as its Promotional Mix
► Promotional mix comprise:
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Advertising
Personal selling
Sales promotion
Public Relations
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Advertising
► Paid
form of non-personal communication of
ideas/products in the prime media
► Prime media:
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►2
TV
Newspapers
Magazines
Billboard posters
Radio
Cinema
Others
Aspects: message & medium
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Personal Selling
► Most
effective as it allows approach to be tailored
to needs of the individual customer
► Involves:
 Constructive dialogue with customers to identify their
needs
 Promote products & company benefits on an individual
basis
 Answer questions, resolve problems
 Get feedback
 Make a sale
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Personal Selling (contd)
► May
have to use sales force
► Sales force use push strategy
► Push strategy: encouraging intermediaries to buy
the product
► (Pull Strategy: support retailers by providing
after sales service – encouraging consumers to
demand the product)
 Push used in personal selling , advertising and sales
promotion
► Advantages
& disadvantages? See p 299
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Sales Promotion
► Providing
incentives for customers/
distribution channel to stimulate demand for
product
► Specific, usually short-term
► When used effectively, will help move old
stocks, counteract competitor activity,
merchandise new products & encourage
repeat buying
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Sales Promotion (contd)
►
Commonly referred to as “Below the Line” promotion.
Directed at:
 Ultimate consumer (pull strategy)
 Distribution channel (push strategy – known as “selling into the
trade”)
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Methods:
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Price promotions
Coupons
Gifts with purchase
Competitions & prizes
Money refunds
Frequent user/loyalty incentives
Point-of-sales displays
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Publicity
► Communication
of a product, brand or
business by placing info in the media
without paying for it directly
► News release to announce new product
launches, company success, etc
► Articles to trade publications/newspapers
► Sponsorship
► Charitable donations
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PR (contd)
► Defined:
“The planned and sustained effort to
establish and maintain goodwill and mutual
understanding between an organisation and its
publics”
► Publics: employees, shareholders, trade unions,
customers, media, government
► Role of PR: identify the relevant publics and to
influence their opinions by:
 Reinforcing favorable opinions
 Transforming neutral opinions to positive
 Changing/neutralising hostile opinions
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PR (contd)
► Techniques
in PR:
 Consumer communications (thru promotional
videos, press releases etc)
 Business communications (thru corporate
identity design, websites, etc)
 Internal/employee communications (thru e.g.,
newsletters)
 External communications
 Financial communications
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Advantages/disadvantages of each
type:
► See
p 294 of your study materials
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Adoption & Diffusion Strategies
► Adoption curve: p 336
► Characteristics: p 336-337
► This curve shows when different
ideas:
groups accept
 Innovators (first 2.5%)
 Early adopters (next 13.5%) : likely to be young, mobile
and creative
 Early majority (Next 34%) : unlikely to be opinion
leaders
 Late majority (Next 34%) : are wary of new concepts
 Laggards & non-adapters (Last 16%) : least open to
new ideas
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Matching Promotion to Marketing
Strategy
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Different promotional approaches suitable for different stages in
the PLC
Introduction: especially if the product is ground-breaking,
customers need info on its uses & benefits – promote the idea,
not necessarily the company’s product
Once rival products come into the market, promotion shifts from
building primary demand to stimulating company’s brands
Shift from personal selling to mass selling
As competition increases, persuasion becomes key promotion
objective, hence, mass advertising
When product’s share of the market is declining – either have
promotion costs to remain profitable, or can raise promotion
budget to remain profitable
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Matching Promotion to Marketing
Strategy (contd)
► Market
conditions determine which
elements in the promotional blend the
company concentrates on
► In markets approaching perfect competition,
price becomes important. Hence,
advertising concentrates on value-for-money
& sales promotion on discounts
► Mix also dictated by company’s financial
resources – ads can be expensive
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