Basic Marketing

PROMOTION
 01
What is promotion
in marketing mix?
 1.1. Promotion definitions
Promotion = marketing communication
Promotions refer to the entire set of activities,
which communicate the product, brand or service to the
user. The idea is to make people aware, attract and
induce to buy the product, in preference over others.

Promotion is a marketing tool, used as a strategy

to communicate between the sellers and buyers.
Through this, the seller tries to influence and convince
the buyers to buy their products or services. It assists in
spreading the word about the product or services or
company to the people.
 1.1. Promotion definitions

 Promotion may be done locally, regionally,

nationally, or internationally.
 The goal of promotion is to communicate
with the largest target audience possible.
 Promotion helps to attract new customers,
increase sales to existing customers, and
stimulate brand name recognition.
 1.1. Promotion definitions
Promotion should be designed to…
 Create an awareness and understanding of companies
and/or products and to introduce new products, inform
consumers or changing prices, and explain new
services.
 Convince consumers about the benefits or using
certain products or patronizing particular businesses.
 Remind consumers where to purchase certain
products, to encourage purchases, and to stimulate
additional purchases.
 02
Promotion mix
 2. Promotion mix
The promotion mix is…
the combination of all types of communication
used by a business to inform, persuade, or
remind consumers about a company and/or its
products.
the specific blend of advertising, sales promotion,
public relations, personal selling, and direct-
marketing tools that the company uses to
persuasively communicate customer value and
build customer relationships.
 2. Promotion mix
Advertising

Sales promotion
Major
Major
Promotion
Promotion Public relations
Tools
Tools
Personal Selling

Direct marketing
 2.1. Advertising
Advertising is any paid form of non-personal
presentation and promotion of ideas,
goods, or services by an identified
sponsor.
– Broadcast
– Print
– Internet
– Outdoor
 2.1. Advertising
 Paid-for communication
 Many different advertising media
- TV & radio, newspapers & magazines, online, cinema,
billboards
 Consumers subjected to many advertising
messages each day = hard to get through
 Mass market advertising is very expensive
 2.2. Sales promotion
Sales promotion is the short-term incentives
to encourage the purchase or sale of a product
or service
 Tactical, point of sale material or other
incentives designed to stimulate purchases
 Short term incentives to increase sales
 Some promotions aimed at consumers; -
others at intermediaries or sales force
 2.2. Sales promotion
Examples of sales
promotion  loyalty points
 coupons
 free gift
 money off
 points of sale
 competitions displays
 demonstrations  BOGOF
 free sample  trade in offer
 2.3. Public relations
Public relations involves building good relations
with the company’s various publics by obtaining
favorable publicity, building up a good corporate
image, and handling or heading off unfavorable
rumors, stories, and events.
 Press releases
 Sponsorships
 Special events
 Web pages
 2.4. Personal selling
Personal selling is the personal presentation by
the firm’s sales force for the purpose of making
sales and building customer relationships.
 Sales presentations
 Trade shows
 Incentive programs
 Promotion on a person to person basis
 2.4. Personal selling

 Two way communications

 Meeting with potential customers to close a sale
 By telephone, at meetings, in retail outlets and
by knocking on doors
 Highly priced, low volume and highly technical
products rely heavily on personal selling.
 2.5. Direct marketing
Direct marketing involves making direct
connections with carefully targeted individual
consumers to both obtain an immediate response
and cultivate lasting customer relationships – by
using direct mail, telephone, direct-response
television, e-mail, and the Internet to communicate
directly with specific consumers.
 Catalog
 Telemarketing
 Kiosks
 2.5. Direct marketing

 Allows a business to generate a specific response

from targeted groups of customers
 Allows a business to focus on several marketing
objectives:
- increasing sales to existing customers
- building customer loyalty
- re-establishing lapsed customer relationships
- generating new business
 Discussion

1. Advantages and disadvantages of each

promotion tool?
2. What are differences between advertising
and sales promotion, personal selling and
direct marketing?
 Advertising +/-
Advantages Disadvantages
• Wide coverage • Often expensive
• Control of message • One way
communication
• Repetition means that
the message can be • Lacks flexibility
communicated
• Limited ability to close
effectively
a sale
• Can be used to build
brand loyalty
 Sales promotion +/-
Advantages Disadvantages
• Effective at achieving a • Sales effect may only
quick boost to sales be short-term
• Encourages customers • Customers may come
to trial a product or to expect or anticipate
switch brands further promotions
• May damage brand
image
 Public relations +/-
Advantages Disadvantages
• Improved brand image • No Direct Control
and recognition
• Lack of Guaranteed
• Increasing Sales and Results
Leads
• High cost
• Message control
• Cost-Effectiveness
 Personal selling +/-
Advantages Disadvantages
• High customer attention • High cost
• Message is customized • Labour intensive
• Interactivity • Expensive
• Persuasive impact • Can only reach a limited
number of customers
• Potential for development of
relationship
• Adaptable
• Opportunity to close the
sale
 Direct marketing +/-
Advantages Disadvantages
• Focus limited resources on • Response rates vary
targeted promotion enormously
• Can personalize the • Negative image of junk
marketing message mail and email spam
• Relatively easy to measure • Databases expensive to
response & success maintain and keep accurate
• Easy to test different
marketing messages
• Cost-effective if customer
database is well managed
03
Marketing
communication process
3.1. Marketing communication
process
Message
 3.1. Marketing communication process
Sender is the party sending the message to another party.
Encoding is the process of putting thought into symbolic
form.
Message is the set of symbols the sender transmits.
Media refers to the communications channels through which
the message moves from sender to receiver.
Decoding is the process by which the receiver assigns
meaning to the symbols.
Receiver is the party receiving the message sent by another
party.
Response is the reaction of the receiver after being exposed
to the message
Feedback is the part of the receiver’s response
communicated back to the sender
Noise is the unplanned static or distortion during the
communication process, which results in the receiver’s
getting a different message than the one the sender sent
 3.2. Steps in Developing Effective
Communication

1. Identify the target audience

2. Determine the communication objectives
3. Design a message
4. Choose media
5. Select the message source
6. Collect feedback
 3.2. Steps in Developing Effective
Communication
Step 1: Identify the target audience
Marketing communications begins with a clear target
audience to answer these questions:
What will be said (message content)
How it will be said (message structure, format)
When it will be said
Where it will be said
Who will say it (source)
Target audiences may be potential buyers of the
company’s products, current users, deciders, or
influencers, individuals, groups, particular public, or the
general public.
 3.2. Steps in Developing Effective
Communication
Step 2. Determine the communication
objectives
Marketers seek a purchase response that result
from a consumer decision-making process
that includes the stages of buyer readiness.
 3.2. Steps in Developing Effective
Step 3. Design aCommunication
message
• AIDA Model: Get Attention - Hold Interest - Arouse
Desire - Obtain Action
• Designing includes the message content, structure
and format.
 Message content—what to say
 Message structure—how to say it
 Message format—through what way to express
 3.2. Steps in Developing Effective
Step 4. ChoosingCommunication
media
Personal communication
 Personal communication involves two or more people
communicating directly with each other.
Face-to-face, Phone, Mail, E-mail, Internet chat
 Personal communication is effective because it allows
personal addressing and feedback.
 Control of personal communication
 Company - salespeople
 Independent experts - Consumer advocates, Buying
guides
 Word of mouth – Friends, Neighbors, Family
 3.2. Steps in Developing Effective
Step 4. ChoosingCommunication
media
Non-Personal Communication Channels
Non-personal communication is media that carry
messages without personal contact or feedback— including
major media, atmospheres, and events—that affect the
buyer directly.

 Major media include print, broadcast, display, and

online media.
 Atmospheres are designed environments that create
or reinforce the buyer’s leanings toward buying a
product.
 Events are staged occurrences that communicate
messages to target audiences - Press conferences,
 3.2. Steps in Developing Effective
Step 5. SelectingCommunication
the message source
The message’s impact on the target audience is affected by
how the audience views the communicator.
 Celebrities, e.g. athletes, entertainers
 Professionals, e.g. health care providers

Step 6. Collecting feedback

Involves the communicator understanding the effect
on the target audience by measuring behavior
resulting from the behavior.
 3.2. Steps in Developing Effective
Communication
Step 6. Collecting feedback

Involves the communicator understanding the effect on the

target audience by measuring behavior resulting from the
behavior.
 04
Setting the Total Promotion
Budget and Mix
4.1. Setting the Total Promotion
Budget
● Affordable budget method
● Percentage-of-sales method
● Competitive-parity method
● Objective-and-task method

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4.1. Setting the Total Promotion
Budget
● Affordable budget method sets the budget at an
affordable level.
– Ignores the effects of promotion on sales
● Percentage-of-sales method sets the budget at a
certain percentage of current or forecasted sales or unit
sales price.
– Easy to use and helps management think about the
relationship between promotion, selling price, and
profit per unit
– Wrongly views sales as the cause than the result of
promotion

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Setting the Total Promotion Budget and
Mixsets the budget to match
● Competitive-parity method
competitor outlays.
 Represents industry standards
 Avoids promotion wars
● Objective-and-task method sets the budget based on what
the firm wants to accomplish with promotion and includes
 Defining promotion objectives
 Determining tasks to achieve the objectives
 Estimating costs

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Setting the Total Promotion Budget and
Mix
Shaping the Overall Promotion
Mix
The Nature of Each Promotion Tool
● Advertising
● Personal selling
● Sales promotion
● Public relations
● Direct marketing

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 Setting the Total Promotion Budget and
Mix
● Advertising reaches masses of geographically
dispersed buyers at a low cost per exposure and
enables the seller to repeat a message many times; is
impersonal, cannot be directly persuasive as personal
selling, and can be expensive.
● Personal selling is the most effective method at
certain stages of the buying process, particularly in
building buyers’ preferences, convictions, and actions
and developing customer relationships.

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 Setting the Total Promotion Budget
and Mix
● Sales promotion includes coupons, contests, cents-off
deals, and premiums that attract consumer attention and
offer strong incentives to purchase. It can be used to
dramatize product offers and to boost sagging sales.
● Public relations is a very believable form of promotion
that includes new stories, features, sponsorships, and
events.
● Direct marketing is a non-public, immediate, customized,
and interactive promotional tool that includes direct mail,
catalogs, telemarketing, and online marketing.

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 Setting the Total Promotion Budget and
Mix
Promotion Mix Strategies
● Push strategy involves pushing the product to the
consumers by inducing channel members to carry
the product and promote it to final consumers.
○Used by B2B companies

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 Setting the Total Promotion Budget and
Mix
Promotion Mix Strategies
● Pull strategy is when the producer directs its marketing
activities toward the final consumers to induce them to
buy the product and create demand from channel
members.
○Used by B2C companies

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 Setting the Total Promotion Budget and
Integrating the PromotionMix
Mix: Checklist
● Analyze trends—internal and external.
● Audit the pockets of communication spending throughout the
organization.
● Identify all customer touch points for the company and its
brands.
● Team up in communications planning.
● Create compatible themes, tones, and quality across all
communications media.
● Create performance measures that are shared by all
communications elements.
● Appoint a director responsible for the company’s persuasive
communications efforts.
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 Socially Responsible Marketing
Communication
● Communicate openly and honestly with consumers and
resellers.
● Avoid deceptive or false advertising.
● Avoid bait and switch advertising.
● Conform to all regulations.
● Follow rules of “fair competition.”
● Do not offer bribes.
● Do not attempt to obtain competitors’ trade secrets.
● Do not disparage competitors or their products.

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