PROMOTION:Information and Exchange Values, Promotional Strategies

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Introduction to Business MGT 211

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

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:

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.

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

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

The nature of the product

ii.

The Target Audience

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Introduction to Business MGT 211

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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