Promotional Concepts & Strategies
Ch. 17 ME
Promotion and Promotional Mix
Section 17.1
Promotion – is persuasive communication Informs people about their products and services To enhance public image and reputation, and persuade people
that their products are valuable Product Promotion – to convince prospects to select its
products or services instead of a competitor’s brands Promotional activities explain the major features and benefits Helps companies foster good relations with existing customers
Institutional Promotion – is used to create a favorable image for a business, help it advocate change, or take a stand on trade or community issues
Example: maintaining an informational Web site
The Concept of Promotion
1. Personal Selling2. Advertising3. Direct Marketing4. Sales Promotion5. Public Relations
Type of Promotion in the Promotional Mix
Personal Selling – requires that a company employ sales representatives who generate and maintain direct contact with prospects and customers
Costliest form of promotionAdvertising – is a form of non-personal promotion
Pay to promote ideasCan be found anywhereIs “one-way” communication
Type of Promotion in the Promotional Mix
Direct Marketing – is a type of advertising directed to a targeted group of prospects and customers rather than to a mass audience
Two forms:Direct Mail – sent via regular mail to a home or businessElectronic Direct mail – e-mail
Goal – to generate sales or leads for sales representatives to pursueGives recipients an incentive to respondIs “one-way” communication
Type of Promotion in the Promotional Mix
Sales Promotion – represents all marketing activities – other than personal selling, advertising, and public relations – to stimulate purchasing and sales
According to American Marketing Association (AMA)Objectives:
Increase salesInform potential customers about new productsCreate a positive business or corporate image
Type of Promotion in the Promotional Mix
Public Relations (PR) – activities enable an organization to influence a target audience
Try to create a favorable image for a company, its products, or its policiesGoal – to cultivate media relations with reporters who cover a specific industry
Type of Promotion in the Promotional Mix
News Release – is an announcement that is sent to the appropriate media outlets
Publicity – is one tactic that public relations professionals use Placement - Involves bringing news or newsworthy
information about an organization to the public’s attention
Main function – is to develop a positive perception or awareness of an organization in the marketplace
Advantages – free; viewed as more objective; appears more credible
Disadvantages – is content; not easily controlled; negative stories
Writing News Releases
Promotional Mix – a combination of strategies and a cost-effective allocation of resources Business follow a series of steps that range from
identifying the target to measuring the results Strategies are designed to compliment one another Elements must be coordinated Sales personnel need to be aware
Promotional Budget – is a percentages of sales, or dictated by revenue and operational costs, to set an amount allocated for promotion use
The Concept of the Promotional Mix
The Push-Pull Concept Push Policy – to promote a product to large retailers to
sell its products, a manufacturer may to use a mix of personal selling, advertising and buying discounts Is used only with the next partner in the distribution
channel Main Purpose – is to convince a retailer to stock the
products being promoted Pull Policy – use a different promotional mix of local
and national advertising, in-store displays, sales promotion, and public relations to reach consumers Directs promotion towards consumers
The Concept of the Promotional Mix
Type of Promotion1. Section 17.2
Sales Promotion – are incentives that encourage customers to buy products or services Used to encourage customers Supported by advertising Either business-to-business (B2B) or business-to-
consumer (B2C)
Sales Promotion
Trade Promotions – are sales promotion activities designed to get support for a product from manufactures, wholesales, and retailers More money is spent on promoting to businesses than
consumers Need good business ethics to be fair Major Trade Promotions include:
Promotional allowances Cooperative advertising Slotting allowances Sales force promotions Trade show and conventions
Trade Promotions
Promotional Allowances – represent cash payments or discounts given by manufacturers to wholesalers or retailers for performing activities to encourage sales
Cooperative Advertising – a manufacturer supports the retailer by helping to pay for the cost of advertising its product likely
Slotting Allowances – is a cash premium paid by a manufacturer to a retailer to help the retailer cover the costs of placing the manufacturer’s product on the shelves
Sales Force Promotion – are awards given to dealers and employees who successfully meet or exceed a sales quota
Trade Shows & Conventions – showcase a particular line of products
Trade Promotions
Consumer Promotions – are sales strategies that encourage customers and prospects to buy a product or service Support the components of the promotional mix Major consumer sales devices include:
Coupons Premiums Deals Incentives Product Samples Sponsorship Promotional Tie-Ins, Cross-Promotion, & Cross-Selling Product Placement Loyalty Marketing Programs Online Loyalty Marketing Point-to-Purchase Displays
Consumer Promotions
Coupons – are certificates that entitle customers to cash discounts on goods or services
Premiums – are low-cost items given to consumers at a discount or for free Three types are:
Factory Packs – are free gifts places in product packages Traffic Builders – are low-cost Coupon Plans – are ongoing programs offering a variety
of premiums in exchange for labels or coupons obtained from a product or label
Consumer Promotions
Deals (price packs) – offer short-term price reductions that are marked directly on the label or package
Incentives – create customer excitement and increase sales Are higher-priced products earned and given away
through: Contests – are games or activities that require the
participant to demonstrate a skill Sweepstakes – are games of chance Rebates – are discounts offered by manufacturers to
customers who purchase an item during a given time period
Consumer Promotions
Product Samples – is a free-trial size of a product sent through the mail, distributed door-to-door, or given away to retail stores and trade shows
Sponsorships – company pays a fee for the to promote itself and its products or services at or on a set location Negotiate the right to use logos and names on retail
products High-profile promotional medium Title Sponsor – is an organization that pays to have its
name incorporated into the name of the sponsored location
Consumer Promotions
Promotional Tie-Ins (Cross-Promotion, & Cross-Selling) - involve sales promotional arrangements between one or more retailers or manufacturer Partners combine their resources to conduct a
promotion that will create additional sales for each partner
Can be complex and involve several companies Increasingly popular on the internet
Product Placement – is a consumer promotion that involves using a brand-name product in a movie, television show, sporting event, or even in a commercial for another product
Consumer Promotions
Loyalty Marketing Program (frequent buyer program) – reward customers for patronizing a company Customer Loyalty – means that customers are so
satisfied with a brand or retailer that they continue to buy that brand or patronize that retailer even when they have other from which to choose
Online Loyalty Marketing – online version, offered by web only companies, of loyalty marketing
Point-of-Purchase Displays – are displays designed primarily by manufacturers to hold and display their products Usually placed in high traffic areas and promote impulse
purchases
Consumer Promotions