Promotion
It would be safe
to say that most companies engage in some form of
promotional activity every day of the year. Promotion is one of the four Ps of
marketing—price, product, place, and promotion. Promotion is
generally thought of as a sequence of activities designed to inform
and convince individuals to purchase a product, subscribe
to a belief, or support a cause. All of the various tools available
to marketing managers for promotional activities constitute what is
known as the promotional mix.
Promotional Mix
Marketing
managers use different components of the promotional mix as tools for
achieving company objectives—
advertising, personal
selling,
public relations, and sales
Promotion. Each of these elements can be further
divided into additional subcomponents or strategies. The majority of
a company''s promotional resources are usually spent on these four
elements for a simple reason: Companies perceive these methods as the
most effective means to promote their products. Other specialized
promotional techniques, however, are also used to enhance promotional
objectives.
Advertising
Advertising is often thought of as the paid, nonpersonal
communication used in the promotion of a cause, idea, product, or
service by an identified sponsor. The various advertising delivery
methods include banners at sporting events, billboards, Internet Web
sites, logos on clothing, magazines, newspapers, radio spots, and
television commercials. Among the common forms of advertising are
advocacy, comparative, cooperative, informational, institutional,
persuasive,
product, reminder, point-of-purchase, and specialty.
Personal
Selling Personal selling is considered one of the most effective
promotional techniques because it facilitates interaction between
consumer and seller.
With personal selling, a salesperson
can listen to and determine a consumer''s needs by asking questions
and receiving feedback from the consumer. Furthermore, personal
selling activities can generate long-lasting friendships between
consumers and sellers that typically generate many repeat purchases.
Personal selling can also occur by means of interactive computers,
telephone conferences, and interactive videoconferencing.
A drawback
of personal selling, however, is its high cost. Examples of products
promoted through personal selling include automobiles, life
insurance, real estate, and many industrial products.
Public
Relations Public relations has been de scribed as building
goodwill
with a company''s various publics, including consumers, employees,
government officials, stockholders,
and suppliers. The overall goal of any public relations effort is to
project a
positive company image when dealing with such issues as
community and government relations, employment practices, and
environmental issues.
Consumers.
Public relations efforts are extremely important for maintaining a
company''s consumer base. Consumers must believe that they are buying
from a caring, honest, and trustworthy
company. Negative media stories about, for example, exploiting
workers or producing substandard
products can do enormous damage to a company in the eyes of
consumers. Erosion of a company''s client base is likely to result in
both lost sales and lost market share.
Employees.
The most valuable asset a company has is its employees. Therefore, it
is essential that employees believe in their company. Public
relations communications are extremely important in ensuring that
employees receive information about the company before outside media
receive and report the information. A good example of providing
superior public relations would be to inform company employees that a
small reduction in the work force is required but that a full
severance package will be provided for laid-off employees. Although
this news is not positive, the employees are hearing about it first
from the company and are also aware that tbe receiving
assistance from the company. If employees read or see negative
reports about the employer without a credible
public relations explanations, they may find other work or reduce
their productivity because of low morale.
Government
officials. Maintaining a positive public image is also important
because government agencies and offices (e.g., Federal Trade
Commission, Federal Communication Commission) monitor the media and
have regulatory oversight
over company activities. Positive stories in the media obviously help
promote a positive image to government regulators, which reduces the
chance of being investigated and possibly fined. The opposite is also
true: Stories about client complaints or other dishonest
practices or potentially illegal actions will draw the government''s
attention and probably some sort of investigation—something that no
company wants. An investigation can drag on for months, even years,
providing even more negative publicity. Even if the government
regulators find no wrongdoing, the public is still likely to be
skeptical because the company was investigated. Therefore, every
company must make its best effort to answer any questions that
regulators have regarding negative media stories or consumer
complaints. A strong, well-organized public relations department will
ward off potential trouble by being honest, friendly, positive, and
helpful to government regulators and members of the news media.
Stockholders.
Another key interest group for any company that offers publicly
traded securities is the stockholders. If company stockholders
generally receive positive news about a company, they are more likely
to maintain investment, which helps keep the stock price up. Negative
news that is not countered with positive public relations can create
uncertainty about how the company is running and encourage
stockholders to sell and to invest in other companies. This action
can cause the stock value to decrease, making it difficult to attract
new investors.
Suppliers.
Positive public relations are essential for a company''s relation with
its suppliers. Suppliers are most concerned about being paid for the
product they are selling to a company. Since most suppliers are
generally not paid until ten to twenty days after delivery of their
product, they must have faith in the ability of a company to pay its
bills. Any negative news regarding a company''s financial position in
the absence of a full and complete explanation from the public
relations department may result in a damaged reputation with
suppliers. Suppliers could stop shipping their products or demand
that payment is made at the time of delivery. Neither option is
appealing to a company, and both could cause critical delays in
getting its products to market.
Sales
Promotion Sales promotions are marketing practices designed to
facilitate the purchase of a product that do not include advertising,
personal selling, or public relations. Companies use sales promotion
for a variety of reasons; (1) to attract new product users who will
hopefully
turn into loyal consumers who keep buying the product; (2) to reward
existing consumers with a price reduction, thereby maintaining their
loyalty; and (3) to encourage repeat sales from occasional consumers.
Special
Promotional Activities
Companies use a
variety of sales promotion tactics to increase sales, including
advertising specialties, cash refund offers/rebates, contests and
sweepstakes,
coupons, patronage rewards, point-of-purchase displays, premiums,
price packs/cents-off deals, samples, and trade shows.
Advertising
specialties. Companies frequently create and give away everyday
items with their names and logos printed on the items such as
bottle/can openers, caps, coffee mugs, key rings, and pencils.
Companies prefer to use inexpensive handouts that will yield constant
free advertising when used by the recipient.
Cash refund
offers
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