Transcript The Role of Promotion - CTAE Resource Network

The Role of Promotion
• Promotion- any form of communication a business or
organization uses to inform, persuade, or remind people
about its products and improve its public images.
• Product promotion - used to convince potential
customers to buy products from it instead of from a
competitor.
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Explains major features and benefits of its products
Tells where those products are sold
Advertises sales on those products
Answers customer questions
Introduces new products
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The Role of Promotion
• Institutional Promotion- used to create a favorable image
for itself. Does not directly sell a certain product.
However, may ultimately result in increased sales of a
company’s products.
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Four Types of Promotion
• 1. Advertising - any paid form of nonpersonal
presentation and promotion of ideas, goods, or services
by an identified sponsor.
• Six Advantages of Advertising
– 1. A large number of people usually see the advertiser’s message
– 2. Costs per potential customer are usually lower than other
forms of promotion
– 3. Can choose the most appropriate media to reach target mkt
– 4. Can control the content of an advertisement
– 5. Ads are subject to repeat viewing
– Ads can “presale” products
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Four Types of Promotion
• Four Disadvantages of Advertising
– 1. Cannot focus well on individual needs
– 2. Some forms of advertising can be too expensive for many
businesses
– 3. Sometimes advertising is wasteful and inefficient - message
may be spent on non-potential customers
– 4. Advertising must be brief
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Four Types of Promotion
• 2. Publicity - placing newsworthy information about a
company, product, or person in the media. Can be used to
promote particular events and promote particular
products. The main purpose of publicity is to build an
image. Image - the way a business or organization is
defined in people’s minds.
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Four Types of Promotion
• Advantages of Publicity
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Publicity is free; advertising is not
Can be used to create a positive image within the community
Viewed as being more credible or believable than advertising
Viewed as news, people more attention to publicity
• Disadvantages of Publicity
– Give up much of your control of your message
– Not all publicity is positive
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Four Types of Promotion
• 3. Sales Promotion - All marketing activities, other than
personal selling, advertising, and publicity, that are used
to stimulate consumer purchasing and sales
effectiveness.
• Objectives of Sales Promotion
– Increase sales
– Inform customers about new products
– Create a positive store or corporate image
• 3 Characteristics
– Short term activities
– Offers some type of incentive
– Can be successfully used in all channels of distribution
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Four Types of Promotion
• Sales promotion can be either consumer or trade oriented
• Trade Promotions - sales promotion activities designed to gain
manufacturers’, wholesalers’, and retailers’ support for a product.
More money is spent on promoting to businesses than to consumers.
– 1. Slotting allowances - a cash premium paid by the manufacture
to a retail chain for the costs involved in placing a new product on
its shelves.
– 2. Buying allowances - special price discount given by
manufacturers to wholesalers and retailers to encourage them to
either buy a product or buy a larger quantity.
– 3. Trade Shows and Conventions - designed to reach wholesalers
– 4. Sales incentives - awards given managers and employees who
successfully meet or exceed their company’s set sales quota.
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Four Types of Promotion
• Consumer Sales Promotions - designed to encourage
customers to buy a product.
– 1. Licensing - Organizations, such as manufactures, movie makers,
sports teams, and celebrities, may license for a fee their logo,
trademark, trade characters, names and likenesses, or personal
endorsements to a business to be used in promoting the
business’s products.
– 2. Promotional tie-ins - involve sales promotional arrangements
between one or more retailers or manufacturers. They combine
their resources (advertising and sales promotional activities) to
do a promotion that creates additional sales for each partner.
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Four Types of Promotion
– 3. Visual Merchandising and Displays – Visual Merchandising - the coordination of all physical elements in a
place of business so that it projects the right image to its customers
– Displays - visual and artistic aspects of presenting a product to a target
group of customers.
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Four Types of Promotion
– 4. Premium and Incentives - most popular and frequently used sales
promotion type
– Premiums - low cost items given away free to consumers as a condition
of purchase.
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Coupons - certificates given to customers entitling cash discounts
Factory Packs (in-packs)- free gifts placed in product packages
Traffic Builders - low cost premiums like key chains, pens
Coupon Plans - ongoing programs in exchange for labels, coupons, or other
tokens from one or more purchases
– Incentives - higher-priced products given in contests or sweepstakes
– 5. Product Samples - free trial size of a product that is sent through the
mail, distributed door-to-door, or through retail stores and trade shows
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Four Types of Promotion
• Advantages of Sales Promotions
– Unique and has special appeal to a potential customer
– Helps build customer loyalty
• Disadvantages of Sales Promotions
– Difficult to end without the customers becoming dissatisfied
– Store image and sales can suffer if the promotion is not properly
planned and managed
– Only designed to supplement other promotional efforts and
cannot make up for poor products
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Four Types of Promotion
• 4. Personal Selling - making an oral sales presentation to
one or more potential buyers. On a per contact basis,
personal selling is the most expensive form of promotion.
– Order-taking personnel - cashiers, counter clerks, and sales
associates, perform routine tasks.
– Order-getting personnel - professional salespeople, are more
involved in informing customers and helping them to buy. Usually
sell big ticket items like real estate, cars, appliances, and
industrial goods
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Four Types of Promotion
• Promotional Mix - a combination of different types of
promotion. A business decides on a promotional mix that
will be most effective in persuading customers or other
businesses to purchase and support the business’s
products.
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Promotional Mix
• Factors affecting the selection of a promotional
mix
– Good, Service, or Idea
• Type of product
• Product nature
• Stage of life cycle
– Product’s market
• Type of consumer
• Number of Consumers
• Geographical location
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Promotional Mix
– Distribution System
– Product’s Company
• Historical perspective
• Available funds
• Size of sales force
– Competition
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Publicity and Public Relations
• Publicity - Placing newsworthy information about a
company, product, or person in the media.
• Advantages
– Free to the business
– Seen as more credible than advertising
• Disadvantages
– Lack of control by the business - bad stories can get printed
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Publicity and Public Relations
• Public Relations - any activity designed to create goodwill
toward a business.
• Benefits of PR
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Increasing sales
Increasing firm’s good reputation
Increasing customers reception of advertising messages
Spreading accurate information to the public
Conditioning customers to expect quality products from the
company
– Reducing the impact of problems
– Helping to obtain better treatment from government
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Audiences for PR
• Internal Audiences - groups within the organization
• Employee Relations - goal is to keep your employees
happy by using:
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Tuition reimbursement
Newsletters
Health and wellness programs
Opportunities for communications
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Audiences for PR
• External Audiences - groups outside the organization
• Customers - Satisfied customers = repeat business. Ways
to keep customers happy include:
– Provide special services and amenities such as gift-wrapping,
check cashing, free delivery, free parking, etc.
– Advisory boards - panels of consumers that make suggestions
about products and businesses
– Customer newsletters, annual reports
– Customer events - seminars, lunches, entertainment
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Audiences for PR
• Community - company sponsors activities that benefit the
civic, social, and cultural life of the community. Activities
can include:
– School partnerships - HP donating computers to the high school
– Sponsorship of community events
– Scholarships
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Public Relations
• News Release - a pre-written story about the company that is
sent to various media for publication. It usually contains
information about the company’s employees, stores,
operations, products, corporate philosophy, or participation
in an event or program. Can contain hard or soft news.
– Hard News - information that should be announced right away
because the public will want to know about it immediately
– Soft News - information that does not need to be announced
immediately because it will be of as much interest to the public later
as it is now
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Purposes of News Releases
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To introduce new products
To keep the business in the public eye
To position the business’s image
To support good employee relations
To create good community relations
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Getting Your News Release in the
Media
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Include a captioned photograph with the release
Meet media deadlines
Write an appropriate number of releases
Direct the release to a specific person
Advise the staff that you have sent out a release
Reread the release after setting it aside
Keep a copy of every release
Send a cover letter with the release
Send a thank-you note after the release is used
Avoid pressuring the editor
Avoid mentioning publicity or advertising
Avoid playing favorites
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Public Relations
• Press Kit - a folder containing articles, news releases,
feature stories, and photographs about a company,
product, or person. Press kits are given to the media to
assist them in reporting on the intended news item.
• Press Conference - a meeting in which media members
are invited by the business or organization to hear an
announcement about a newsworthy event.
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