Transcript 4.01 Acquire a foundational knowledge of promotion to understand

4.01 Acquire a foundational
knowledge of promotion to
understand
its nature and scope. PR:001
Performance Indicator
(A.) Explain the role of promotion as
a marketing function
The role of promotion is to help a
business/company achieve its marketing
goals. For most businesses the basics
marketing goals are to sell products and make
a profit. Promotion helps businesses reach
their goals by communicating with potential
customers. Companies rely on promotion to
inform people about their products and
services.
Lesson opener: Choose a product you’ve
purchased within the last several months. What
made you want or need to buy it? How did you
hear about the product? How did you know
where to buy to product? How did you know
about the price or how much it would cost?
Promotion is:
1. Promotion is marketing communication. In
other words, promotion is the business of
communicating with customers. It will
provide information that will assist them in
making a decision to purchase a product or
service. The razzmatazz, pace and creativity
of some promotional activities are almost
alien to normal business activities.
2. Promotion is a marketing function
needed to communicate information
about goods, services, images,
and/or ideas to achieve a desired
outcome.
3. Promotion is the element of the
marketing mix that encourages
customers to buy or to have certain
views or opinions about goods,
services, images, and/or ideas.
• What does promotion
communicate?
• Answer: Businesses
communicate messages
to their customers who
receive the message.
The message is to tell
customers about certain
goods, services, or
ideas, and persuades
the customers to buy or
to form an opinion.
• Have students describe
a commercial or ad that
they have seen recently,
and explain what the
commercial or ad
communicated to them.
• Can you think of some
promotions that caught
your attention?
. List users of promotion
• Any organization that has something to sell uses
promotion at one time or another. Nearly all
organizations, whether for-profit or not-forprofit, in all types of industries, must engage in
some form of promotion. Such efforts may range
from multinational firms spending large sums on
securing high-profile celebrities to serve as
corporate spokespersons to the owner of a oneperson enterprise passing out business cards at a
local businessperson’s meeting.
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Activities
What does your school sell?
What does a university sell?
What does your doctor’s office sell?
What do Presidential candidates sell?
Describe the benefits of using
promotion
• 1. Promotion benefits:
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a. Companies/organizations/businesses
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b. Customers
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c. The economy
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2. Promotion benefits by:
a. Creating increased sales
b. Giving a company or product a strong position
Companies use product promotion to convince
potential customers to select their products or
services instead of a competitor’s brands.
• c. Increasing customer loyalty
• Product promotion helps companies’ foster good
relations with existing customers, thereby
enhancing customer loyalty.
• d. Increasing the awareness of a
company/product
• Through a company’s web site, promotion
provides customers with product and general
information, answers questions, provides
news, and sometimes shows the product in
detail.
• e. Customers are better informed
• f. Customers are more satisfied
g. Increased employment opportunities
• Promotion provides job opportunities to millions.
While many companies hire staff and maintain
their own in-house promotions, others hire the
services of professional public relations and
advertising agencies. Promotion also creates
demand for products and with demand comes
mass production. Mass production in turn
creates more jobs.
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• h. Increased media support
• Promotion helps to pay for mass media,
meaning television, radio, billboards, Internet,
magazines, newspapers, etc. Without
promotional dollars from advertisers, mass
media would probably pass the costs to all of
us (we the media users).
D. Describe the cost associated with
the use of promotion
• Companies use many methods of promotion.
Some are free or nearly free, such as issuing a
press release about a new or improved
product. Many other methods can be costly.
When marketers plan promotions, they know
that there will be costs associated with each
task involved.
• The cost associated with promotion or
advertising goods and services often
represents a sizeable proportion of the overall
cost of producing an item. Considering costs
involved ahead of time helps marketers create
reasonable promotional budgets for each
promotional effort.
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Costs include:
a. Advertising fees
b. Costs for sales promotion and contests
c. Salaries for promotional and sales staff
Describe types of promotional
objectives
Companies and organizations have three main
promotional objectives.
• To inform: Potential customers must know something
about a product if they are to buy at all. A firm with a
really new product may not have to do anything but
inform consumers about it - and show that it meets
consumer needs better than other products.
• For example, when Mazda introduced its stylish and
affordable Miata roadster, the uniqueness of the car
simplified the promotion job. Excitement about the product
also generated a lot of free publicity in car magazines.
• To persuade: When competitors offer similar
products, the firm must not only inform
customers that its product is available but also
persuade them to buy it. A 'persuading'
objective means the firm will try to develop a
favorable set of attitudes so customers will
buy - and keep buying – its
product. Promotion with a persuading
objective often focuses on reasons why one
brand is better than competing brands.
• For example, to help convince consumers to buy
Tylenol rather than some other firm's brand, Johnson &
Johnson's ads tout Tylenol as the pain relief medicine
most often used in hospitals. Companies often use
tools such as coupons, free samples, rebates, and
contests as part of their persuasive promotions. These
incentives may provide a boost to the customer to
choose one product over the other. Other methods of
persuasion include emphasizing the product to be
“new and improved,” contain “extra strength,” are
“environmentally friendly,” or “vitamin enriched.”
• To remind: If target customers already have
positive attitudes about a firm's marketing
mix, a 'reminding' objective might be
suitable. This objective can be extremely
important in some cases. Even though
customers have been attracted and sold once,
they are still targets for competitors'
appeals. Reminding them of their past
satisfaction may keep them from shifting to a
competitor.
Examples
• Campbell realizes that most people know about
its soup - so much of its advertising is intended to
remind.
• State Farm is reminding the customers that they
are always there for them with the slogan, “like a
good neighbor State Farm is there.”
• Restaurants that give customers matchbooks
bearing the company’s address and logo are
reminding customers of their establishment.
Companies may go into detail and consider
the following (more specific
objectives):The possible objectives for
marketing promotions may include the
following:
• Build Awareness – New products and new
companies are often unknown to a market, which
means initial promotional efforts must focus on
establishing an identity. In this situation the
marketer must focus promotion to: 1) effectively
reach customers, and 2) tell the market who they
are and what they have to offer.
• Create Interest – Moving a customer from
awareness of a product to making a purchase can
present a significant challenge. As we saw with
our discussion of consumer and business buying
behavior, customers must first recognize they
have a need before they actively start to consider
a purchase. The focus on creating messages that
convince customers that a need exists has been
the hallmark of marketing for a long time with
promotional appeals targeted at basic human
characteristics such as emotions, fears, sex, and
humor.
• Provide Information – Some promotion is
designed to assist customers in the search stage
of the purchasing process. In some cases, such as
when a product is so novel it creates a new
category of product and has few competitors, the
information is simply intended to explain what
the product is and may not mention any
competitors. In other situations, where the
product competes in an existing market,
informational promotion may be used to help
with a product positioning strategy.
• Stimulate Demand – The right promotion can
drive customers to make a purchase. In the
case of products that a customer has not
previously purchased or has not purchased in
a long time, the promotional efforts may be
directed at getting the customer to try the
product. This is often seen on the Internet
where software companies allow for free
demonstrations or even free downloadable
trials of their products.
• For products with an established customerbase, promotion can encourage customers to
increase their purchasing by providing a
reason to purchase products sooner or
purchase in greater quantities than they
normally do. For example, a pre-holiday
newspaper advertisement may remind
customers to stock up for the holiday by
purchasing more than they typically purchase
during non-holiday periods.
• Reinforce the Brand – Once a purchase is made,
a marketer can use promotion to help build a
strong relationship that can lead to the purchaser
becoming a loyal customer. For instance, many
retail stores now ask for a customer’s email
address so that follow-up emails containing
additional product information or even an
incentive to purchase other products from the
retailer can be sent in order to strengthen the
customer-marketer relationship.
Discuss the relationship of promotion
and marketing
• 1. Promotion is the element of the marketing mix
that encourages customers to buy a product or to
have certain views or opinions.
• 2. Promotion is a marketing function needed to
communicate information about goods, services,
images, and/or ideas to achieve a desired
outcome. Before a business can be successful, it
must interest people in buying its products and
services. The best product in the world will not
sell itself.
• 3. Promotion is sometimes described as
marketing communication because it involves
sending a message to a target audience.
• a. Tell customers that the product is available
• b. Tell customers about the features and
benefits of the product.
• c. Tell customers where the product can be
purchased.
• d. Encourage people to buy the product.