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4.01
4.02
Promotion
“Spread the Word”
Purpose of Promotion
• The purpose of promotion is to tell customers about a
company’s goods, services, images, or ideas and persuade
them to buy or to form an opinion. A company may have an
outstanding product which is priced just right for the market,
but if customers don’t know about the product, no sales will
be made. Promotion, therefore, consists of communication
activities that inform potential customers about goods,
services, images, or ideas to achieve a desired outcome.
Purpose of Promotion
• Businesses use a variety of communication techniques to send
their promotional messages to customers. They communicate
with customers through advertising, personal selling,
publicity, and sales promotion.
Promotional Mix
Mars uses a number of
different methods—
and spokes-candies—
to promote M&M’s.
The specific combination, or blend, of
marketing communication channels that a
business uses to send its messages to
customers is known as the promotional mix.
Each business’s promotional mix is unique,
based on a specific set of circumstances and
product.
Promotional Mix
• A local restaurant, for example, might decide that a
combination of newspaper advertising, coupons, and
radio commercials is the best promotional mix for it to
use. A Fortune-500 company, on the other hand, may
choose to promote its products via Facebook,
national television commercials, magazine
advertisements, and a NASCAR racing team
sponsorship. Regardless of the exact blend of
the promotional mix, the goal is always the same—to
communicate effectively with customers.
Out of Home Media
• An electrical sign located in a high-traffic area
is an effective out-of-home media. Out-ofhome media also include billboards, painted
bulletins, blimps, and hot-air balloons.
Find the Right Blend
• Successful marketers carefully blend the
elements of the promotional mix for the best
possible results. The promotional mix
elements are: advertising, personal selling,
publicity, and sales promotion.
Advertising
• The most visible element of the promotional
mix is advertising—any paid form of nonpersonal presentation of ideas, images, goods, or
services. Advertising helps customers to “put a
face with a name,” no matter whether it’s a
product, a company, an organization, or an idea.
• Businesses often use advertising to encourage
short-term sales, build product awareness, and
develop a brand image.
Advertising
Advertising works best when:
• Product awareness is low (new product)
• Product features are not obvious to consumers
• Product needs to be differentiated from those of
the competition
• Discretionary incomes are high (consumers’ $$$)
• Overall industry sales are rising
Advertising
Advertising has several advantages.
• It can reach a large audience in a broad geographic
area, and since many people receive the same
message, the per contact cost of advertising is low.
• Unfortunately, many of these same individuals tune
the ads out, due to the info. overload prevalent in
today’s society. Even if they do pay attention to ads,
they may need to see an ad 7 times or more before it
takes on meaning. To top it off, advertising is typically
NOT good for delivering complicated messages.
Advertising
• Advertising can be delivered to consumers through a
variety of mass media. Examples include:
• television and radio commercials
• print ads in newspapers and magazines
• out-of-home ads such as billboards and car wraps
• catalogs, direct mail, product placement, banner ads,
paid listings, search engine listings, pay-per-click links,
and email.
Advertising - Stereotypes
• A television commercial depicts a woman mopping the kitchen with
a new floor cleaner. A stereotype is a set image or an assumption
about a person or thing. Until recent decades, many people
associated homemaking or house cleaning as a female's primary
responsibility. However, it is not generally true today. With more
women in the workforce, household and child care (e.g., a man
pouring orange juice for children), responsibilities are often shared
with males. Many males now have successful careers as chefs.
• An ad campaign that presents a variety of people suggests all types
of people drink milk. Therefore, the print ads aren't engaging in
stereotyping. Using a well-known athlete to promote continuing
education does not necessarily promote stereotypes.
Personal Selling
• Personal selling is the form of promotion that determines
client needs/wants and responds through planned,
personalized communication that influences purchase
decisions and enhances future business opportunities.
• At its core, personal selling is all about building
relationships with customers. It’s only natural that the
starting point for personal selling is determining client
needs and wants. By starting with the customer in mind,
salespeople can provide the goods or services that will
best satisfy that person and gain repeat business.
Personal Selling
• Selling is personalized communication, which means
it involves interaction between the customer and the
salesperson. This interaction can take place face-toface, by telephone, or by email.
• Regardless of the means of communication, personal
selling is designed to influence purchase decisions—
in other words, to make a sale. However, it should
not be a strong arm tactic or simply an attempt by
the salesperson to “make a buck.”
Personal Selling
• On a per contact basis, personal selling can be the most
expensive form of promotion. However, the advantages
that it has over advertising usually make it worth the
cost. These advantages include immediate feedback and
flexibility. By watching or listening to a client’s reactions
to a sales presentation, the salesperson can learn what
the individual likes or dislikes about a product.
• As a result, the salesperson can tailor the presentation to
appeal to the particular individual. Another benefit of
personal selling is many customers view it as being more
credible than advertising. It’s no surprise that personal
selling is the most effective form of promotion.
Personal Selling
• Products sold to industrial users are usually
complex, technical, expensive, and require
demonstration. Because of these characteristics,
personal selling should be emphasized. Sales
promotion, publicity, and advertising could be used
to support personal selling.
Personal selling is ideal for
delivering complicated messages
and explaining highly specialized
technical products.
Publicity
• Publicity is an identity-building tactic defined as any
non-personal presentation of ideas, goods, or services
that is NOT PAID FOR by the company/individual that
benefits from or is harmed by it. There is little or no
direct interaction between customers and the company
when the promotional message is received.
• Because publicity is often distributed via 3rd party
sources such as the news media, businesses have little
control over the message presented to customers, the
timing of that message, the location in which the
customers receive the message, etc.
Publicity
• Due to the fact that businesses have little control over
these messages, and also because the company does
not pay to have its message delivered, customers
typically consider the information gained through
publicity to be more credible. They pay close attention
to publicity and view it as news.
• Publicity can be used to build goodwill
toward a company, as well as develop a
positive image of the business.
Publicity
• Publicity comes in many forms. For instance,
favorable press releases and news stories can help to
promote a new product. By appearing on a TV talk
show, an actor or director can publicize her/his new
movie.
• Mention of a company’s charitable activities or
sponsorships in print or broadcast media can help
build good feelings toward the business.
Publicity
• Online publicity – both positive and negative—can take
the shape of testimonials from actual customers on the
company web site, blog entries across the Web,
company-written white papers, conversations on social
media sites, and customer ratings of and/or comments
about the company’s products on independent web
sites.
• The Internet is an integral part of many people’s lives,
so publicity about a product or company online can
have a real impact on customers’ actions.
Company News Release – Publicity
• Publicity is a non-personal form of promotion
that is not paid for by the company or
individual that receives it.
• A news release would be prepared by the
company but presented at the publisher's
expense. Direct mail, a billboard, and a
company TV commercial are examples of
advertising – NOT free publicity.
Mass Media
• Mass media reach a lot of people at the same time.
Included are print, broadcast, direct mail, out-ofhome, and other media. It can literally reach people
around the world at one time.
• Mass media are also capable of reaching a specific
audience, meeting the needs of many businesses,
and presenting large amounts of promotion, but it is
their ability to reach masses of people that is
responsible for their name.
Sales Promotion
Have you ever:
• Seen a window display?
• Used a coupon at a store?
• Watched a product demonstration?
• Received an instant rebate?
• Sampled food products at a grocery store?
Sales Promotion
• If so, you are familiar with sales promotion:
promotional activities other than advertising,
personal selling, and publicity that stimulate
customer purchases.
• Billions of $$$$s a year are spent on sales
promotion activities, including visual
merchandising (displays), coupons, in store
demonstrations, cash discounts and price
incentives, product samples, contests,
introductory offers, and free accessories.
Sales Promotion
• Sales promotions can target either
intermediaries or ultimate consumers.
Regardless of the target market, sales
promotions have their advantages. They are
measurable, have a low cost per exposure,
attract new customers, generate excitement,
encourage quick responses, provide added
value, and boost repeat purchases.
• Sales promotions help to sell old stock, and
adding a free sample of a new product to an
existing product in decline may help to extend
the declining product’s life cycle.
Sales promotions offered to intermediaries
(middlemen) include merchandising
allowances, sales contests, trade shows,
exhibitions, and dealer incentives.
During McDonald’s Monopoly
sales promotion, sales often jump
at least 5%.
Sales Promotions
• On the other hand, sales promotions are very
short-term in nature, and NOT GOOD for
delivering complicated messages. Also, they
can cheapen a company’s image.
• Businesses must be careful when using sales
promotions because they don’t want
customers to develop a “no bonus, no buy”
attitude.
Promotional Mix
• The promotional mix – made up of advertising, personal
selling, publicity and sales promotion plays a key role in
obtaining customers. An appropriate blend of the
promotional elements enables businesses to effectively
communicate with consumers.
• It increases brand recognition, raises product awareness,
and communicates product benefits. By delivering
messages in multiple ways, using multiple promotional mix
elements, a business is more likely to reach its target
market than it would using one form of promotion alone.
The right promotional mix drives sales and ultimately
helps the company reach its marketing objectives and
goals.
Promotional Mix
• By playing follow the leader - competing
businesses within the same industry usually
use quite similar promotional mixes because
many of the factors affecting the promotional
mix are the same for those businesses.
• Businesses also use the same promotional
activities to prevent losing customers to
competitors. Reducing the promotional
budget or trying not to outdo the
competition would make the business less
competitive.
Social Status
• You can increase your social status by
purchasing this product. Materialism is an
emphasis on, or preoccupation with, attaining
things or certain positions—the right clothes,
car, job, or social status.
• Some critics believe that advertisements
reinforce a materialistic attitude in today's
society—defining a person's value in society
by his/her possessions.
Comparison Ad
• For example, an ad for a designer product
might imply you will achieve a certain social
status/acceptance if you buy the product.
• An ad claiming a product has a higher
government rating than a competitor's
product is an example of a comparison ad
Ads – Social Responsibility
• An advertisement stating that a handmade
product is constructed of organic materials is
an example of an ad that reinforces the
concept of social responsibility.
• A business usually would NOT place an
advertisement for the sole purpose of
directing consumers to its web site.
Individualized Messages
• The new information technology that includes
computerized databases allows businesses to
create individualized promotional messages.
Businesses can collect a variety of information
about customers, enter that information into a
database, and use the computer to sort the
data.
New Technology & Promotion
• For example, a business might track customers
according to their preferences for products and then
generate mailing lists and individualized messages
that promote specific products to specific customers.
• Businesses created commercials, premiums, and
publicity campaigns before the new technology was
developed; however, new technology makes some of
these activities easier to perform.
Customized Messages
• Information can be communicated by more venues,
and messages can be customized. Because there are
more people who are using personal computers, new
computer software programs are being developed to
help businesses of all sizes to personalize
promotional messages.
• Personalized messages can be developed for specific
target market members and can be communicated
through traditional direct mail or Internet (e.g.,
electronic mail, web sites) channels.
Technology and Promotion
• Although technological advancements often help
companies become more productive and cost-efficient,
it does NOT necessarily mean the businesses have
additional funds to spend on promotional activities.
• Although computer advancements have helped
accelerate the time to develop promotional campaigns,
it does NOT necessarily affect creativity. The number of
channels needed to carry out promotional plans is
highly dependent on the type of promotional activity.
Advertising Principles & Practice
• Children are impressionable, and the wrong kinds
of advertising can affect their development. This
was one of the most controversial issues of the
1970s.
• Children were watching hours of TV each day, and
some people believed advertisers were taking
advantage of the fact children are impressionable
and often unable to evaluate advertising messages
and make responsible purchase decisions.
Advertising Principles & Practice
• So, legislation was passed and the Better Business
Bureau, among others, published guidelines geared
specifically to advertisers who target children in their
communication.
• Parents were among those who raised issues about
advertising to children but NOT primarily because
their children were asking for the products they saw
on television.
Advertising Principles & Practice
• Research has shown that children exposed to a lot of
advertising do behave differently, but there is no
known research linking juvenile offenders with
watching television advertising.
Laws Governing Promotion
• A business must understand the laws governing
promotional activities vary by country. Some
countries have strict promotional laws that
marketers must follow, while other countries' laws
are lenient.
• A business that breaks a promotional law may have
to pay government fines, which is costly to the
business.
Laws Governing Promotion
• Therefore, it is important for marketers to
understand which promotional activities are, and are
not, permissible in the countries where they sell and
promote products.
• In some countries, industry and consumer groups
influence how the governments regulate promotion.
Some, rather than most, countries have a system of
checks and balances to verify that promotion
regulations are fair.
External Factors Affecting Promotion
• Government regulations, such as the one
prohibiting radio and television cigarette
advertising, are part of the external
factors that affect promotion.
External Factors Affecting Promotion
• A business must understand the laws governing
promotional activities vary by country. Some
countries have strict promotional laws marketers
must follow, while other countries' laws are
lenient.
• A business that breaks a promotional law may
have to pay government fines, which is costly to
the business. Therefore, it is important for
marketers to understand which promotional
activities are, and are not, permissible in the
countries where they sell and promote products.
External/Internal Factors Affecting
Promotion
• In some countries, industry and consumer
groups influence how the governments
regulate promotion. Some, rather than
most, countries have a system of checks and
balances to verify that promotion
regulations are fair.
• Changes in the product's price or
distribution methods, or a reorganization of
the business are examples of internal
factors that affect promotion.
Promotion – Decision-Making
• Promotion helps the customer determine
which product is the right one for him/her,
or the most appropriate. Promotion
introduces new products to consumers and
assists with decision making. It does NOT
help consumers to spend more on products
or delay decisions. It is the salesperson's job
to identify the customer's buying motives, or
reasons for buying
Institutional Promotion
• Institutional promotions aim to create a certain
image in the eyes of consumers relating to the
organization’s role in community affairs. Ex. of
institutional promotion – Charlotte Observer
annually sponsors a marathon which benefits
charities.
• Supporting personal selling activities, introducing
new goods or services, and creating consumer
interest in goods or services are all objectives of
promotional advertising.
Promotion – Persuade to Buy
• Product promotion attempts to persuade
consumers to buy a good/service. A half-price
sale is attempting to do just that. Since the
business is paying for its own announcement, this
is NOT publicity.
• Institutional promotion aims to create a certain
image in the eyes of consumers. Sales promotion
understands the concepts and strategies needed
to communicate information about goods,
services, images, and/or ideas to achieve a
desired outcome.
Focus of Promotion
• In the growth stage, competing products appear
on the market, and promotional activities focus
on pointing out differences between competing
products.
• When a product is first placed on the market, it is
in the introductory stage, and it is promoted to
gain customer awareness. Little product
promotion occurs during the declining stage;
rather, money is invested in promotional
activities to maintain a positive company image.
REVIEW
• 81. (2) What is an example of an external
factor that affects promotion?
•
•
•
•
A.
B.
C.
D.
Reorganization of the business
Government regulation of ads
Increase in a product's price
A change in distribution methods
• 81. (2) What is an example of an external
factor that affects promotion?
•
•
•
•
A.
B.
C.
D.
Reorganization of the business
Government regulation of ads
Increase in a product's price
A change in distribution methods
• 82. (2) How does promotion benefit
customers?
• A. Causes them to postpone making buying
decisions
• B. Enables them to identify their buying
motives
• C. Helps them to select appropriate products
• D. Requires them to spend more on product
• 82. (2) How does promotion benefit
customers?
• A. Causes them to postpone making buying
decisions
• B. Enables them to identify their buying
motives
• C. Helps them to select appropriate products
• D. Requires them to spend more on product
• 83. (2) What type of promotion is depicted
by a business's one-time announcement of its
half-price sale in the local newspaper?
•
•
•
•
A.
B.
C.
D.
Product promotion
Institutional advertising
Free publicity
Sales promotion
• 83. (2) What type of promotion is depicted
by a business's one-time announcement of its
half-price sale in the local newspaper?
•
•
•
•
A.
B.
C.
D.
Product promotion
Institutional advertising
Free publicity
Sales promotion
• 84. (2) What is an objective of institutional
advertising?
• A. To support personal selling activities
• B. To demonstrate the organization's role in
community affairs
• C. To introduce new goods or services
• D. To create consumer interest in the company's
goods or services
• 84. (2) What is an objective of institutional
advertising?
• A. To support personal selling activities
• B. To demonstrate the organization's role in
community affairs
• C. To introduce new goods or services
• D. To create consumer interest in the company's
goods or services
• 85. (2) In which stage of a product's life cycle
do promotional activities focus on differences
between competing products?
•
•
•
•
A.
B.
C.
D.
Introductory
Growth
Declining
Introduction
• 85. (2) In which stage of a product's life cycle
do promotional activities focus on differences
between competing products?
•
•
•
•
A.
B.
C.
D.
Introductory
Growth
Declining
Introduction
• 86. (2) What form of promotion is generally
emphasized for complex, technical products sold
to industrial users?
•
•
•
•
A.
B.
C.
D.
Personal selling
Sales promotion
Publicity
Advertising
• 86. (2) What form of promotion is generally
emphasized for complex, technical products sold
to industrial users?
•
•
•
•
A.
B.
C.
D.
Personal selling
Sales promotion
Publicity
Advertising
• 87. (2) How do competing businesses within
the same industry usually react to each other's
promotional mixes?
•
•
•
•
A.
B.
C.
D.
By playing follow the leader
By reducing their promotional budgets
By trying not to outdo each other
By changing distribution channels
• 87. (2) How do competing businesses within
the same industry usually react to each other's
promotional mixes?
•
•
•
•
A.
B.
C.
D.
By playing follow the leader
By reducing their promotional budgets
By trying not to outdo each other
By changing distribution channels
• 88. (2)
•
•
•
•
A.
B.
C.
D.
What is an example of publicity?
Company news release
Direct mail
Billboard
Company television commercial
• 88. (2)
•
•
•
•
A.
B.
C.
D.
What is an example of publicity?
Company news release
Direct mail
Billboard
Company television commercial
• 89. (2) What is an example of advertisement
stereotyping?
• A. A television commercial depicts a woman mopping
the kitchen with a new floor cleaner.
• B. A print ad shows a middle-aged male pouring
orange juice in glasses for his children.
• C. A magazine ad campaign presents a variety of
people who encourage others to drink milk.
• D. A well-known athlete records a PSA that emphasizes
the importance of continuing education.
• 89. (2) What is an example of advertisement
stereotyping?
• A. A television commercial depicts a woman mopping
the kitchen with a new floor cleaner.
• B. A print ad shows a middle-aged male pouring
orange juice in glasses for his children.
• C. A magazine ad campaign presents a variety of
people who encourage others to drink milk.
• D. A well-known athlete records a PSA that emphasizes
the importance of continuing education.
• 90. (2) Which advertising message reinforces
the concept of materialism?
• A. We make this product by hand and use
organic materials.
• B. The government rates our product higher
than our competitor's product.
• C. You can increase your social status by
purchasing this product.
• D. For more information about our line of
products, visit our web site.
• 90. (2) Which advertising message reinforces
the concept of materialism?
• A. We make this product by hand and use
organic materials.
• B. The government rates our product higher
than our competitor's product.
• C. You can increase your social status by
purchasing this product.
• D. For more information about our line of
products, visit our web site.
• 91. (2) What is new technology enabling
businesses to create that is impacting the
promotion function?
•
•
•
•
A.
B.
C.
D.
Personalized premiums
Publicity campaigns
Attractive commercials
Individualized messages
• 91. (2) What is new technology enabling
businesses to create that is impacting the
promotion function?
•
•
•
•
A.
B.
C.
D.
Personalized premiums
Publicity campaigns
Attractive commercials
Individualized messages
• 92. (2) How have technological advancements
enhanced a small business's ability to promote
its products?
• A. Most companies need fewer channels to coordinate
and carry out promotional activities.
• B. Small companies now have more money to spend
on promotional activities.
• C. Less time and creativity are required to develop
effective promotional campaigns.
• D. Information can be communicated by more venues,
and messages can be customized.
• 92. (2) How have technological advancements
enhanced a small business's ability to promote
its products?
• A. Most companies need fewer channels to coordinate
and carry out promotional activities.
• B. Small companies now have more money to spend
on promotional activities.
• C. Less time and creativity are required to develop
effective promotional campaigns.
• D. Information can be communicated by more
venues, and messages can be customized.
• 93. (2) Why are there specific guidelines for
advertising to children?
• A. Research indicated that juvenile offenders watched more
advertising on television than the average child.
• B. Children are impressionable, and the wrong kinds of
advertising can affect their development.
• C. Parents mounted a campaign against advertisers because
their children demanded products they saw advertised.
• D. Children revealed, in focus groups, that while they like
watching ads, it doesn't make them behave differently.
• 93. (2) Why are there specific guidelines for
advertising to children?
• A. Research indicated that juvenile offenders watched more
advertising on television than the average child.
• B. Children are impressionable, and the wrong kinds of
advertising can affect their development.
• C. Parents mounted a campaign against advertisers because
their children demanded products they saw advertised.
• D. Children revealed, in focus groups, that while they like
watching ads, it doesn't make them behave differently.
• 94. (2) Which statement is true about regulating
international promotional activities?
• A. Most countries have a system of checks and balances
to verify that promotion regulations are fair.
• B. Businesses must submit all promotional materials to
the International Ad Coalition for approval.
• C. Governments bear the sole responsibility of
monitoring promotional materials and regulations.
• D. A business must understand that the laws governing
promotional activities vary by country.
• 94. (2) Which statement is true about
regulating international promotional activities?
• A. Most countries have a system of checks and
balances to verify that promotion regulations are fair.
• B. Businesses must submit all promotional materials to
the International Ad Coalition for approval.
• C. Governments bear the sole responsibility of
monitoring promotional materials and regulations.
• D. A business must understand that the laws
governing promotional activities vary by country.
• 95. (2) Why are promotional media such as
newspapers and television referred to as mass
media?
•
•
•
•
A.
B.
C.
D.
They can present large amounts of promotion.
They direct promotions to a specific audience.
They reach a lot of people at the same time.
They try to meet the needs of many businesses.
• 95. (2) Why are promotional media such as
newspapers and television referred to as mass
media?
•
•
•
•
A.
B.
C.
D.
They can present large amounts of promotion.
They direct promotions to a specific audience.
They reach a lot of people at the same time.
They try to meet the needs of many businesses.
• 96. (2) What is an example of out-of-home
media?
•
•
•
•
A.
B.
C.
D.
A poster on the wall of a subway station
An eye-appealing card placed in a mailbox
A calendar imprinted with a company's name
An electrical sign located in a high-traffic area
• 96. (2) What is an example of out-of-home
media?
•
•
•
•
A. A poster on the wall of a subway station
B. An eye-appealing card placed in a mailbox
C. A calendar imprinted with a company's name
D. An electrical sign located in a high-traffic
area