Nama : Stefanus Dominggo (21208537)
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What is Promotion?
Promotion is one of the primary elements used in the marketing mix. Thus, promotional efforts should work in harmony with product marketing, pricing, and distribution actions that target prospects and customers. When assembling a promotional plan, marketers typically employ one or more of the following five promotional subcategories: personal selling, advertising, sales promotion, direct marketing, and publicity (or public relations).
These communication tools serve as tactics within the promotional plan to accomplish objectives such as:
- Increasing sales
- Launching new products
- Creating and building brand equity
- Establishing market positioning
- Retaliating against competition
- Strengthening brand image
As organizations implement their promotional plan, they also seek to educate consumers, increase consumer demand, and differentiate their products and services in the marketplace.
The Promotional Mix
Increased market segmentation, information technologies, and digital communications have created new ways for promoting products across different media. Today, organizations can create online banner advertisements, social networking websites, blogs, and search engine optimization campaigns to promote their products and services. However, traditional promotional tools such as special events, celebrity endorsements, in-store coupons, and newspapers are also employed to entice customers to purchase goods. For example, retailers often use promotional tactics including discounts, store rebates, free items, contests, and other special offers to drive new sales and repeat purchases.
The promotional tools used to educate customers and generate sales vary depending on the organization’s objective. Because public relations (PR) focuses on influencing and shaping public opinion, PR efforts are useful for building brand value and generating positive stories around products and services. Events, which often generate publicity, can serve long-term objectives for building partnerships with external stakeholders, strengthening customer loyalty and enhancing industry credibility.
However, organizations may choose to use short-term mechanisms such as sales promotions and coupons to generate immediate customer interest and revenue. Direct mailers or email newsletters further support these incentives to prompt customer action and purchases. Print, television, radio, and online advertising can be used to promote all of these activities and drive sales for the organization. These promotional tools are even more effective when built into an integrated marketing communication strategy, since all communications work together simultaneously to multiply consumers’ exposure to brand messaging.
Promotion is a form of corporate communication that uses various methods to reach a targeted audience with a certain message in order to achieve specific organizational objectives. Nearly all organizations, whether for-profit or not-for-profit, 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 one-person enterprise passing out business cards at a local businessperson’s meeting.
Like most marketing decisions, an effective promotional strategy requires the marketer understand how promotion fits with other pieces of the marketing puzzle (e.g., product, distribution, pricing, target markets). Consequently, promotion decisions should be made with an appreciation for how it affects other areas of the company. For instance, running a major advertising campaign for a new product without first assuring there will be enough inventory to meet potential demand generated by the advertising would certainly not go over well with the company’s production department (not to mention other key company executives). Thus, marketers should not work in a vacuum when making promotion decisions. Rather, the overall success of a promotional strategy requires input from others in impacted functional areas.
In addition to coordinating general promotion decisions with other business areas, individual promotions must also work together. Under the concept of Integrated Marketing Communication marketers attempt to develop a unified promotional strategy involving the coordination of many different types of promotional techniques. The key idea for the marketer who employs several promotional options (we’ll discuss potential options later in this tutorial) to reach objectives for the product is to employ a consistent message across all options. For instance, salespeople will discuss the same benefits of a product as mentioned in television advertisements. In this way no matter how customers are exposed to a marketer’s promotional efforts they all receive the same information.
Promotion involves disseminating information about a product, product line, brand, or company. It is one of the four key aspects of the marketing mix. (The other three elements are product marketing, pricing, and distribution.)
Promotion is generally sub-divided into two parts:
Below the line promotion: All other promotion. Much of this is intended to be subtle enough for the consumer to be unaware that promotion is taking place. E.g. sponsorship, product placement, endorsements, sales promotion, merchandising, direct mail, personal selling, public relations, trade shows
The specification of these four variables creates a promotional mix or promotional plan. A promotional mix specifies how much attention to pay to each of the four subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image.
An example of a fully integrated, long-term, large-scale promotion are My Coke Rewards and Pepsi Stuff.
What is Sales Promotion?
Sales promotion describes promotional methods using special short-term techniques to persuade members of a target market to respond or undertake certain activity. As a reward, marketers offer something of value to those responding generally in the form of lower cost of ownership for a purchased product (e.g., lower purchase price, money back) or the inclusion of additional value-added material (e.g., something more for the same price).
Sales promotions are often confused with advertising. For instance, a television advertisement mentioning a contest awarding winners with a free trip to a Caribbean island may give the contest the appearance of advertising. While the delivery of the marketer’s message through television media is certainly labeled as advertising, what is contained in the message, namely the contest, is considered a sales promotion. The factors that distinguish between the two promotional approaches are:
- whether the promotion involves a short-term value proposition (e.g., the contest is only offered for a limited period of time), and
- the customer must perform some activity in order to be eligible to receive the value proposition (e.g., customer must enter contest).
The inclusion of a timing constraint and an activity requirement are hallmarks of sales promotion.
Sales promotions are used by a wide range of organizations in both the consumer and business markets, though the frequency and spending levels are much greater for consumer products marketers. One estimate by the Promotion Marketing Association suggests that in the US alone spending on sales promotion exceeds that of advertising.
Nearly half of Britain’s leading companies are spending more of their marketing budget on sales promotion than they did last year. This seems to show a shift from the old myth that promotions offer nothing more exciting than money-off coupons and ‘2 for the price of 1’ offers.
So, as the great multinationals have started to use sales promotion as a key driver in the marketing mix, how can smaller and newer businesses also benefit from using promotional activity?
According to the Institute of Sales Promotion (ISP), sales promotion comprises a range of tactical marketing techniques, designed within a strategic marketing framework, to add value to a product or service to achieve specific sales and marketing objectives.
Sounds complicated? Put simply, sales promotion is a means of achieving marketing objectives by offering short-term additional value to a brand. The key words in this definition are:
- Marketing objectives. The objective is usually to increase sales in one guise or another.
- Short-term. Promotional activity has to be temporary in order not to become an intrinsic attribute of the brand
- Additional. Promotions have to offer the customer something extra, whether it is value, e.g. a free product, goods, eg. a branded gift or prizes, or other intangible benefit, such as a link with a charity.
A brand, whether it is a product, service or company, is taken to be a sum of it marketing mix: Product – attributes, function, packaging, Price – positioning, Place – distribution, location, and Promotion.
As a result of the combination of these four elements, a brand will differentiate itself from its competitors and acquire its own special brand values.
Sales Promotion, a bit like Marketing, is a broad church. When we talk about Sales Promotion we are talking specifically about Merchandising, Sampling and Experiential Marketing.
The four crucial ingredients of any good sales promotion are Ideas & Execution and Measurement & Evaluation. You want your promotional activity to be more than just a passive endeavour – you must actively engage your audience if you want to make an emotional connection, create a lasting impression and get the right response. Customer Experience is everything and good sales promotion will give your brand stand out and impact in a cluttered consumer space.
The objective is clear, you want to sell more, keep customers coming back for more, understand your customers better and create brand advocates that will talk about the brands they love and recommend them to friends. The live environment will test the salience and efficacy of your products like no other.
We have developed our own unique approach to sales promotion with several high profile clients including Dale Farm, Tayto and Avondale. Diageo are our biggest Sales Promotion client and over the last nine years what we haven’t learnt working with them isn’t worth knowing.
Why We Need Promotion?
Even the most large of organizations offer their item, and for valid purpose. So what exactly is this reason? As easy as it may audio, we need promotion to let individuals know about a item. It need not be just a product; it can be a support, a residence, and anything that can be marketed for cash.
The key factor here is the point that promotion is done about factors that are traded for real cash, and anyone who wants to offer something wants to create some benefit on it, and that is why promotion is done. Didn’t get it? Study on.
When you think of promotion, what is it that first comes to mind? More likely than not, it will be symptoms. The signboards, the automobile symptoms, the promotion banner ads, and a whole lot more. And who places up these symptoms, after all? Apart from the apparent response that the signmakers do it, it is the big organizations and organizations that put up the most symptoms in promotion. The greatest objective of these organizations, of any organization, for that issue, is to benefit.
The quantity that goes into promotion is not a little one, so this should be apparent. They are in it for the a longer period transport. By promotion, each item that they produce goes out into the thoughts of the individuals who see the signboards and thus improves the possibilities of the item’s purchase. The way promotion is done is just as essential as the act of promotion itself. If the promotion you see is something crazy, or done in a way that you can keep in thoughts quickly, you will go examine it out in a store for yourself, and if you do like it, you’ll buy it. So the promotion has been a achievements.
Advertising is a key device in any item’s lifestyle. Right from when an concept for a item is believed of, and the choice is created to produce it extensive, the promotion group starts its perform – considering and developing store symptoms, automobile symptoms, signboards, promotion occasion banner ads relevant to the item, and much more. Advertising is not restricted to items created by organizations alone – you could promote if you’re using a meeting in your position, welcoming some superstar, beginning a store, beginning a purchase, almost anything that the globe at large needs to know about can be promoted.
If you go further into why we need promotion, the point that many individuals are actually based on this very promotion to stay their lifestyle becomes another purpose for its lifestyle. If promotion were to be eliminated, so many individuals or individuals would become homeless; the quantity would be incredible to say the least.
The most well-known, and thus the most typical type of promotion is using signboards. Threes a signboard basically everywhere you look – in all designs, and in all colors. Technological innovation has created more and more types of signboards available, but the conventional hand-painted indication created by signmakers has not disappeared. Among the more recent types of performs are LED symptoms, that promote using shiny lighting style, and are seen in all locations around the globe, lighting style up the nightime with their lighting.
Vehicle symptoms and signboards still stay among the top types of indication promotion, and the need for these is ever existing. Since the expenses of large hoardings and other such factors is quite great, most small-time companies and separate suppliers choose the signboard way of promotion. Not only is it inexpensive, but it is also more efficient – you can position several little signboards in several locations instead of only one large holding on to, and for perhaps 50 percent the price, accomplish the same outcome.
There are many ways to get attention for a new product, service or even election. One of the easiest is to develop a promotional item. They are often cheap and everybody loves these freebies.
These products can be bought in many places and are cheap. There are many websites that sell these types of items and will even print what is needed on them.
Once you have the item, you need a way to distribute these products. Fairs are great ways to do this. Arenas are forever holding job fairs, health fairs etc. For politicians rallies work well. In addition these items can be included in the product they are promoting or a related product. Also, some crafty marketing directors are able to entice people to save labels or box tops and send for promotional items. Concert promoters have been getting people to shell out major bucks to buy tee shirts printed with the bands name for years.
Promotional items take many forms. As mentioned above, a common form is clothing. Who doesn’t own a tee-shirt promoting a band, new product or an event they attended? Other clothing items that make good promotional items include hats and jackets. The more visible the item is the better. Other than clothing items, personal items make good promotional material. These are ideal if they are items people carry with them. Travel mugs and key chains fall into this category. Next to tee shirts, probably the most popular items are small items such as tape measures, can openers or even USB drives.
Of course these items have limited value. They are only meant to increase name recognition. In addition to the value to the promoter, they need to provide value to the person given the item. In order to do that, they need to provide a function for the user. A bumper sticker or a sign are probably not a good idea unless there is a contest or election involved. Tee shirts are probably the most widely used because they are something that most people will wear over and over. Pens and pencils travel mugs, golf towels are also good items to pick.
In conclusion, promotional items are ideal ways to market new goods. Also, politicians use them to increase name recognition. In addition, businesses use it to bring peoples attention to their company. They are also used by charities, health organizations and government agencies.
Kinds Of Promotion
In the Sales Promotion tutorial we saw that promotions can be classified into three main areas:
- Consumer Market Directed
- Business Market Directed
- Government Market Directed
In this tutorial we look more deeply into each of these classifications by examining the different types of promotions that fall into each. As we will see much of what is covered is very familiar to even those who are new to marketing as it involves promotional methods consumers are exposed to nearly every day. For marketers, it is important to understand the value each type of sales promotion holds for helping them meet their promotional objectives.
Consumer Market Directed
Possibly the most common and popular of sales promotions, consumer marketing directed sales promos are those intended to appeal to the end consumer. Consumers are exposed to sales promotions nearly every day. Recent studies have shown that sales promos do play a conscious role in the buying decision process.
For example, Uprinting promotions can offer discounts on all its products to print material end users to influence their purchasing habit.
Business Market Directed
This type of sales promotion marketing is targeted at other business entities. It is a sales promo that may propose a certain level of distributorship and other trade functions to companies. Often formal and less creative than a Consumer Market Directed Sales Promo, it works well in Business-to-business dealings. This type of sales promo can also be limiting due to the marketer’s personal network.
For example, Uprinting promotions business market directed campaign can tap into its suppliers and offer them the opportunity to carry uprinting products for a share in the profits.
Government Market Directed
Due to the wide nature of marketing communications target market, sales promos can span the identification of the Government as part of our market. Dealings with government agencies and other state related offices will require a separate marketing plan and a government market directed communications campaign for your sales promotion will best suit the project.
For example, Uprinting promotions will direct its sales promo to government units to gain favorable branding and image enhancing advantages. Uprinting can tap into the consumer market after establishing its connections with the local governing body.