Chapter 17

Promotional Concepts and Strategies

Sec 17.1 Promotion and Promotional Mix

• Promotion is persuasive communication– companies rely on promotion to inform people

about their products and services– companies use promotional techniques to

enhance their public image and reputation and persuade people that their products are valuable

– goals of promotional activities is summerized by the phrase AIDA

AIDA

• Attract Attention to product

• Build Interest in product

• Create Desire for product

• Ask for Action

Product Promotion• businesses use product promotion to

convince prospects to select its products or services instead of a competitor’s brands

• explains – major features and benefits of the product or

service – where it is sold– advertise sales– introduce new offerings

• product promotion also helps companies foster good relations with existing customers, thereby enhancing their loyalty

Institutional Promotion• used to create a favorable image for a

business

• help the business advocate for change

• take a stand on trade or community issues

** do not directly sell a product or service these activities do foster a favorable image for the company

Types of Promotion in the Promotional Mix

• Five basic categories– Personal selling– Advertising– Direct marketing– Sales promotions– Public relations

Personal Selling• requires that a company employ sales

representatives who generate and maintain direct contact with prospects and customers– one of costliest forms of promotion– direct contact can take the form of personal

meetings, telemarketing, email contact, and correspondence

– typically takes place after or result of other promotional activities

Advertising• form of non-personal promotion

• with advertising, a company engages in a one-way communication to the prospect

• companies pay to promote ideas, goods, services in a variety of media outlets

• advertising found everywhere, radio, magazines, newspapers, television, Web sites, gymnasiums, professional team venues, buses, and billboards

Direct Marketing• type of advertising directed to a targeted

group of prospects and customers rather than a mass audience– printed direct mail sent via regular mail to a

home or business– electronic direct mail

Goals of direct marketing are to generate sales leads for sales representatives to pursue

Sales Promotion

Represents all marketing activities other than personal selling, advertising, and public relations that are used to stimulate purchasing and sales

- objectives of sales promotion are to increase sales, inform potential customers about new products, and create a positive business or corporate image

Public Relations

• activities that enable an organization to influence a target audience

• often public relations campaigns try to create a favorable image for a company, its products, or its policies

• one of the goals of a public relations program is to cultivate media relations with reporters who cover a specific industry

Writing News Releases

• although there are many media tools, one of the most important ones is the news release– a news release is an announcement sent to the

appropriate media outlets.– a release announces newsworthy developments

about a companies products or services, distribution channels, facilities and operations, revenues and earnings partners, employees, and events

Publicity

• involves bringing news or newsworthy information about an organization to the publics attention– this process is known as placement– can be launched to achieve various goals,

main function is to develop a positive perception or awareness of the organization in the marketplace

– negative publicity can devastate a company or organization

Concept of Promotional Mix• Promotional Mix is a combination of

strategies and cost effective allocation of resources

- most companies use more than one type of promotion to achieve their promotional goals

- a business establishes a promotional mix by following a series of steps that range from identifying the target market to measuring the results

- the strategies of the mix are designed to complement one another- advertising and direct marketing create awareness of a business’s product- public relations hrlps cultivate a favorable image and brand recognition sales promotion activities stimulate sales, reinforce advertising, and support selling efforts- personal selling builds on all of these previous efforts by completing the sale

• Elements of the promotional mix must be coordinated- ie. national advertising should be reinforced by

local promotional efforts

*** when promoted products are not available as advertised or when the sales staff is uninformed about a promotion, sales are lost and customers are dissatisfied

Promotional Budget• In large companies, the marketing

department determines: – the promotional mix – establishes the budget– allocates resources– coordinates the campaign– supervises any outside resources– measures the results

• No precise way to measure the exact results of spending promotional dollars

• Often the promotional budget is a percentage of sales

Push-Pull Concept• Manufacturer’s often develop a promotional

mix for each segment of the distribution channel– Push Policy - to promote a product to large

retailers that sells its products, a manufacturer might want to use a mix of personal selling, advertising, and buying discounts

** this type of promotion is used only with the next partner in the distribution channel – the manufacturer pushes the product to the retailer

– Pull-Policy – directs promotion toward the consumers

** the same manufacturer might use a different promotional mix of local and national advertising, in-store displays, sales promotion, and public relations to reach consumers

** the pull policy directs promotion towards consumers and is designed to create consumer interest and demand

** consumer demand can pull or encourage retailers to carry the product being promoted

** advertising geared to consumers, in addition to premiums, samples, and demonstrations