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Marketing, Unit 3
Promotion
Promotion – any form of communication a business or organization uses to
inform, persuade, or remind people about its products and improve its
public image
product promotion – used to convince potentials customers to buy
products from it instead of from a competitor
 explains the major features and benefits of its products
 tells where those products are sold
 advertises sales on those products
 answers customer questions
 introduces new products
institutional promotion – create a favorable image for itself – does not
sell a certain product
Types of Promotion
Advertising – any paid form of nonpersonal presentation and
promotion of ideas, goods or services by an identified sponsor
is distinguished from other forms of promotion by
 time or space devoted to it is paid for
 uses a set format to carry the message rather than personal,
one-on-one selling
 identifies the sponsor of the message
Advantages of using advertising
 a large number of people usually see the message
 advertising costs per potential customer (whether that customer
is a viewer, reader, or listener) are usually lower than other
forms of promotion
 businesses can choose the most appropriate media to reach
their target market, since there are many ways to advertise
 a business can control the content of an advertisement and
adapt it to the medium and method of presentation
 advertisements are subject to repeat viewing - this helps to
keep the advertiser’s message in people’s minds
 advertisements can “presell” products – that is, they can
influence people to make up their minds about a purchase
before they shop
Disadvantages of using advertising
 advertising cannot focus well on individual needs because the
message is the same for all customers
 some forms of advertising, such as television, can be too
expensive for many businesses
 can be wasteful and inefficient – many people that read
magazine ads or view television, are not potential customers
 advertisements must be brief (because of cost)
Publicity – placing newsworthy information about a company,
product, or person in the media
principal function of publicity – building an image (the way a
business or organization is defined in people’s minds – impression
based on a combination of factors, physical surroundings, personal
experiences, and things written or said in the media)
 publicity is free
 audience for news is huge, held in high esteem by the public
 business give up control over the message (publicity may be
negative)
Sales Promotion – all marketing activities other than advertising,
personal selling, and publicity that are used to stimulate consumer
purchasing and sales effectiveness
 usually involves short-term activities
 usually offers some type of incentive to make a purchase
 can be successfully used in all channels of distribution with
manufacturers, wholesalers, retailers, and consumers
 may be either consumer-oriented or trade-oriented
Trade Promotions – sales promotion activities designed to gain
manufacturers, wholesalers, and retailers support for a product
 slotting allowances – is a cash premium paid by the
manufacturer to a retail chain for the costs involved in
placing a new product on its shelves – other uses of
slotting allowances include cents-off specials, charges
for store shelves, penalties if a product does not sell, and
store advertising and display costs
 buying allowances – special price discount given by
manufacturers to wholesalers and retailers to encourage
them to either buy a product or buy a larger quantity of a
product
 trade shows and conventions – provide businesses with
opportunities to introduce new products, encourage
increased sales of existing products, and gain continued
company and product support
 sales incentives – awards given to managers and
employees who successfully meet or exceed their
company’s set sales quota for a particular product or
line of products
Consumer Sales Promotions – designed to encourage customers to
buy a product
 licensing – organizations such as manufacturers, movie
makers, sports teams, or celebrities may license for a fee
their logo, trademark, trade characters, names and
likenesses, or personal endorsements to a business to be
used in promoting the business’s products
 promotional tie-ins – involve sales promotional
arrangements between one or more retailers or
manufacturers
 visual merchandising and displays – visual
merchandising refers to the coordination of all physical
elements in a place of business so that it projects the
right image to its customers displays refer to the visual
and artistic aspects of presenting a product (window,
floor, counter, etc.)
 premiums and incentives – most frequently used
promotions – increase sales by building product loyalty
and attracting new customers premiums – low-cost
items given away free to consumers as a condition of
purchase
o coupons
o factory packs – free gifts placed in product
packages
o traffic builders – low-cost items given away free to
consumers for visiting a new store or attending a
special event
o coupon plans
 product samples – free trial size that is sent through the
mail, distributed door-to-door, or through retail stores
and trade shows
Personal Selling – making an oral presentation to one or more potential
buyers
 Order-taking personnel – cashiers, counter clerks, sales
associates
 Order-getting personnel – informing customers, helping them
to buy (real estate, automobiles, appliances)
Promotional Mix – combination of different types of promotion