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Lecture 9Promotion

MKTG101 Fundamentals of Marketing

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Promotion• PromotionThe marketing activities that make potential customers, partners and society aware of and attracted to the business’s offerings.• Marketing

CommunicationA term for promotion that refers to communicating a message to the marketplace.

• Communication Process

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Objectives of Promotion• Support the organisation's overall marketing

objectives• Demonstrate features and benefits• Encourage awareness, product trial and create

demand• Reinforce the product /brand and encourage

repeat purchase• Increase support offered by retailers• Increase general awareness about and goodwill

towards an organisation.• Build a relationship between customer and brand• Cause-related marketing - Philanthropic activities

tied to the purchase of a product.

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Integrated Marketing CommunicationsThe coordination of organisational efforts to maximise the communication effect.

All marketing mix components as well as other contexts communicate messages about the product/service and the organisation

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Promotion Mix• The four typical

elements of a promotion mix are:

• advertising• public relations• sales

promotion• personal selling

• Technology and social media are providing other promotional possibilities to add to the above

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Advertising• The transmission of paid messages about an

organisation, brand or product to a mass audience.• Worth over $12 billion/year in Australia

• Benefits: Reaches many people at relatively low cost per person

• Limitations: Difficult to measure effectiveness, trustCompetitive advertising• Using advertising to promote the features and benefits of a product relative to competing products.Comparative advertising• Using advertising to directly compare a product against a competing product.

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Creating an Advertising Campaign1. Understand the

market environment

2. Know the target market (audience)

3. Set specific objectives

4. Create the message strategy

5. Allocate resources6. Select media7. Produce the

advertisement8. Place the

advertisement9. Evaluate the

campaign

• Media Options

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Advertising Media Options

Table 9.3

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Public Relations• Aimed at creating and

maintaining relationships between the organisation and its stakeholders.

• Publicity - Unpaid exposure in the media.

• Sponsorship - A paid association with an event or a person.

• Benefits: Credibility, resulting word-of-mouth, low- or no-cost, combat negative perceptions or events.

• Limitation: Reduced controlhttp://www.traveller.com.au/why-djibouti-is-africas

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More on Public Relations• Marketers can generate

good public relations through:

• written communications with stakeholders (e.g. annual reports)

• involvement in charitable donations or acts.

• Another role of PR is to be reactive, countering negative publicity.

• In an economic downturn, many organisations become more subject to negative media coverage

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Personal Selling• Personal communication

efforts that seek to persuade consumers to buy products.

• Expensive, high-involvement or industrial products favour personal selling

• Benefits: Can be specifically tailored to individuals, so has greater influence than advertising, sales promotions and PR strategies.

• Limitations: Expensive, limited reach, labour intensive, time-consuming.

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Sales Promotion• Short-term incentives to encourage purchase of a

product by either resellers or consumers. • Used irregularly to smooth demand• Rewards the sale of company’s products

• Consumer sales promotions include:– Free samples – Discounts– Premium offers – Refunds – Loyalty programs – Rebates– Contests – Point of purchase – Coupons – Event sponsorship

• Benefits: Effective short term tool to boost sales• Limitations: Can lose effectiveness if overused, easily

copied, public becoming increasingly cynical about whether they offer real value.

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Consumer Sales Promotions• Free samplesSample of a product provided for free so that consumers can experience it without committing to a purchase.• Premium offersGiven as a bonus for purchasing a product.• Loyalty

programsSchemes that reward customers based on the amount they spend.

• ContestsEffective in promoting product benefits and allow organisations to build a database of members of their target market.• CouponsVouchers that offer consumers a discount price on a product or service e.g. ‘Shop-A-Docket’.• DiscountsA certain amount off the regular price.

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More on Sales Promotions• RebatesReturn of some of purchase price upon presentation of proof of purchase.• Point of purchase

promotionsIncludes in-store signage and display, and free product trials or demonstrations in stores.• Event sponsorshipsE.g. Exclusive merchandise deal, where sponsor has sole right to sell products at venue.

Trade Sales Promotions–stimulate the products’ movement through the marketing channel.

Examples include:• Conventions

and trade shows

• Sales contests for marketing intermediaries

• Gifts and premium money

• Trade allowances• Cooperative

advertising• Dealer listings

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Additional Forms of PromotionAmbush marketing • The presentation of

marketing messages at an event that is sponsored by an unrelated business or a competitor.

• Marketers need to defend themselves against ambush marketing, including assessing risk and sponsorship value.

• Major events will take steps to reduce impact and protect sponsors.

• Guerrilla marketing

The use of an aggressive and unconventional marketing approach to grab attention.

https://www.youtube.com/watch?v=nJ4uCOJjDF8• Viral marketingUsing social networks to spread a marketing message. Can fail to fire or backfire. Commercial benefits hard to measure.

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Additional Forms of Promotion (II)Product placementThe paid inclusion of products in movies, television shows, video games, songs and books.

A plugWhen the media overtly promotes a product within a program rather than as a separate advertisement.

Permission marketing

Marketing that aims to build an ongoing relationship with customers.

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Integrating Promotion Mix Elements• Marketing organisations

have different promotional needs and finite financial and other resources, so must choose from options in the promotion mix.

• Those with large promotion budgets usually use multiple strategies.

• Small budgets will rely on strategies. fewer, simpler

• Best promotion mix will change over time.

Push and Pull • Push policyAn approach in which a product is promoted to the next institution to “push” goods through the marketing channel. Generally B2B.

• Pull policyAn approach in which a product is promoted to consumers to create demand to “pull” goods through the marketing channel. Generally B2C.