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Introduction to Business

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Introduction to Business ­MGT 211
VU
Lesson 31
PROMOTION
The ultimate goal of a promotion is to increase sales. Other goals include communicating
information, positioning a product, adding value, and controlling sales volume. In deciding on
the appropriate promotional mix, marketers must consider the good or service being offered,
characteristics of the target audience and the buyer's decision process, and the promotional
mix budget.
Advertising strategies often depend on the product life cycle stage. In the introductory stage,
informative advertising helps to build awareness. As a product passes through the growth and
maturity stages, persuasive advertising, comparative advertising, and reminder advertising are
often used. Advertising media include the Internet, newspapers, television, direct mail, radio,
magazines, and outdoor advertising, as well as other channels such as Yellow Pages, special
events, and door-to-door selling. The combination of media that a company chooses is called
its media mix. Personal selling tasks include order processing, creative selling (activities that
help persuade buyers), and missionary selling (activities that promote firms and products
rather than simply close sales). The personal selling process consists of six steps: prospecting
and qualifying (identifying potential customers with the authority to buy), approaching (the first
moments of contact), presenting and demonstrating (presenting the promotional message that
explains the product), handling objections, closing (asking for the sale), and following up
(processing the order and ensuring after-sale service).
Coupons provide savings off the regular price of a product. Point-of-purchase (POP) displays
are intended to grab attention and help customers find products in stores. Purchasing
incentives include samples (which let customers try products without buying them) and
premiums (rewards for buying products). At trade shows, sellers rent booths to display
products to customers who already have an interesting in buying. Contests are intended to
increase sales by stimulating buyers' interest in products.
Many firms began exploring the possibilities of international sales when domestic sales
flattened out in the mid-twentieth century. Because advertising is the best tool for stimulating
product awareness on a country-by-country basis, it has played a key role in the growth of
international marketing. Whereas some firms prefer a decentralized approach (separate
marketing management for different countries), others have adopted a global perspective
(coordinating marketing programs directed at one worldwide audience). Because the global
perspective requires products designed for multinational markets, companies such as Coca-
Cola, McDonald's, and many others have developed global brands. In promoting these
products, global advertising must overcome such challenges as product variations, language
differences, cultural receptiveness, and image differences.
Small business can advertise effective and economically on the Internet. They can also
engage in personal selling activities in local, national, and international markets. Because
coupons and contests are more expensive and harder to manage, small business owners are
likely to rely more heavily on premiums and special sales.
The Importance of Promotion ---- Of the four ingredients in the marketing mix--product,
price, distribution, and promotion -- promotion is perhaps the one most often associated with
marketing. Although there are no guarantees of success, promotion has a profound impact on
a product's performance in the marketplace.
Promotion --- is persuasive communication that motivates people to buy whatever an
organization is selling -- goods, services, or ideas. Promotion may take the form of
advertising, personal selling, publicity, public relations, or sales promotion. A company's
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Introduction to Business ­MGT 211
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promotional strategy defines the direction and scope of the promotional activities that will be
implemented to meet marketing objectives.
Information and Exchange Values
A business uses promotional methods to communicate information about itself and its
products to consumers and industrial buyers. From an information standpoint, promotions
seek to accomplish four things with potential customers:
i.
Make them aware of products.
ii.
Make them knowledgeable about products. Potential customers need to
know where the item can be found, how much it will cost, and how to
use it.
iii.
Persuade them to like products
iv.
Persuade them to purchase products. Persuading motivates people to
satisfy their wants in a particular way. Persuasive advertising lets them
know how your product will benefit them.
Promotional Objectives --- Promotions experts recognize that not all objectives are sales
objectives. Some communications objectives use an indirect approach to make an audience
aware of a new product or change a company's negative image. In addition to increasing
sales, promotion can have four other objectives.
i.
Communicating Information--Information can advise customers about
a product's existence or about its features.
ii.
Positioning Products--process of establishing an identifiable product
image in the minds of consumers. They can base their strategies on
several positioning strategies: on specific product features or attributes,
on the services that accompany the product, on the product's image, on
price, or on category leadership.
iii.
Adding Value--Value-conscious customers gain when the promotional
mix is shifted so that it communicates value-added benefits in its
products.
iv.
Controlling Sales Volume--Increasing promotional activities in slow
periods can help firms in seasonal businesses to achieve more stable
sales volume throughout the year.
Promotional Strategies
i.
A push strategy is a promotional approach designed to motivate
wholesalers and retailers to push a producer's products to end users.
ii.
A pull strategy is a promotional approach that stimulates consumer
demand, which then exerts pressure on wholesalers and retailers to
carry a product. Many firms use combinations of these two very
different strategies.
Promotional Mix --- Marketers use four types of promotional tools: advertising, personal
selling, sales promotions, and publicity and public relations. Market-related factors influence
the promotion mix. The best combination of promotional tools will depend on many factors,
such as
i.
The nature of the product
ii.
The Target Audience
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Introduction to Business ­MGT 211
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iii.
Promotion and the Buyer Decision Process. This is the five-step process
outlined in Chapter 10. Marketers match promotion efforts with different
stages of the buying decision process.
iv.
The Promotional Mix Budget. The combined costs of personal selling,
advertising, sales promotion, and public relations must fall within the
budgeted amount and be balanced to have the desired effects on
attitudes and purchasing decisions.
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Table of Contents:
  1. INTRODUCTION:CONCEPT OF BUSINESS, KINDS OF INDSTRY, TYPES OF TRADE
  2. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:THE ECONOMIC ENVIRONMENT
  3. BUSINESS ORGANIZATION:Sole Proprietorship, Joint Stock Company, Combination
  4. SOLE PROPRIETORSHIP AND ITS CHARACTERISTICS:ADVANTAGES OF SOLE PROPRIETORSHIP
  5. PARTNERSHIP AND ITS CHARACTERISTICS:ADVANTAGES AND DISADVANTAGES OF PARTNERSHIP
  6. PARTNERSHIP (Continued):KINDS OF PARTNERS, PARTNERSHIP AT WILL
  7. PARTNERSHIP (Continued):PARTNESHIP AGREEMENT, CONCLUSION, DUTIES OF PARTNERS
  8. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:ETHICS IN THE WORKPLACE, SOCIAL RESPONSIBILITY
  9. JOINT STOCK COMPANY:PRIVATE COMPANY, PROMOTION STAGE, INCORPORATION STAGE
  10. LEGAL DOCUMENTS ISSUED BY A COMPANY:MEMORANDUM OF ASSOCIATION, CONTENTS OF ARTICLES
  11. WINDING UP OF COMPANY:VOLUNTARY WIDNIGN UP, KINDS OF SHARE CAPITAL
  12. COOPERATIVE SOCIETY:ADVANTAGES OF COOPERATIVE SOCIETY
  13. WHO ARE MANAGERS?:THE MANAGEMENT PROCESS, BASIC MANAGEMENT SKILLS
  14. HUMAN RESOURCE MANAGEMENT:Human Resource Planning
  15. STAFFING:STAFFING THE ORGANIZATION
  16. STAFF TRAINING & DEVELOPMENT:Typical Topics of Employee Training, Training Methods
  17. BUSINESS MANAGERíS RESPONSIBILITY PROFILE:Accountability, Specific responsibilities
  18. COMPENSATION AND BENEFITS:THE LEGAL CONTEXT OF HR MANAGEMENT, DEALING WITH ORGANIZED LABOR
  19. COMPENSATION AND BENEFITS (Continued):MOTIVATION IN THE WORKPLACE
  20. STRATEGIES FOR ENHANCING JOB SATISFACTION AND MORALE
  21. MANAGERIAL STYLES AND LEADERSHIP:Changing Patterns of Leadership
  22. MARKETING:What Is Marketing?, Marketing: Providing Value and Satisfaction
  23. THE MARKETING ENVIRONMENT:THE MARKETING MIX, Product differentiation
  24. MARKET RESEARCH:Market information, Market Segmentation, Market Trends
  25. MARKET RESEARCH PROCESS:Select the research design, Collecting and analyzing data
  26. MARKETING RESEARCH:Data Warehousing and Data Mining
  27. LEARNING EXPERIENCES OF STUDENTS EARNING LOWER LEVEL CREDIT:Discussion Topics, Market Segmentation
  28. UNDERSTANDING CONSUMER BEHAVIOR:The Consumer Buying Process
  29. THE DISTRIBUTION MIX:Intermediaries and Distribution Channels, Distribution of Business Products
  30. PHYSICAL DISTRIBUTION:Transportation Operations, Distribution as a Marketing Strategy
  31. PROMOTION:Information and Exchange Values, Promotional Strategies
  32. ADVERTISING PROMOTION:Advertising Strategies, Advertising Media
  33. PERSONAL SELLING:Personal Selling Situations, The Personal Selling Process
  34. SALES PROMOTIONS:Publicity and Public Relations, Promotional Practices in Small Business
  35. THE PRODUCTIVITY:Responding to the Productivity Challenge, Domestic Productivity
  36. THE PLANNING PROCESS:Strengths, Weaknesses, Threats
  37. TOTAL QUALITY MANAGEMENT:Planning for Quality, Controlling for Quality
  38. TOTAL QUALITY MANAGEMENT (continued):Tools for Total Quality Management
  39. TOTAL QUALITY MANAGEMENT (continued):Process Re-engineering, Emphasizing Quality of Work Life
  40. BUSINESS IN DIGITAL AGE:Types of Information Systems, Telecommunications and Networks
  41. NON-VERBAL COMMUNICATION MODES:Body Movement, Facial Expressions
  42. BUSINESS ORGANIZATIONS:Organization as a System
  43. ACCOUNTING:Accounting Information System, Financial versus Managerial Accounting
  44. TOOLS OF THE ACCOUNTING TRADE:Double-Entry Accounting, Assets
  45. FINANCIAL MANAGEMENT:The Role of the Financial Manager, Short-Term (Operating) Expenditures