Promo%on  

3.3  Decision  making  to  improve  marke3ng  performance  

What you need to know

• Key methods of promotion •  Link between promotion and the

rest of the marketing mix •  Influences on promotional methods • Analysing promotional decisions

Promo%on  Links  Closely  With  

Promo%on  Product  Life  Cycle  

Branding  

Corporate  Social  Responsibility  

Technological  Change  

Sales  Forecas%ng  

Budge%ng  

Many  Uses  of  Promo%on  

•  Increase  sales  •  A:ract  new  customers  •  Encourage  customer  loyalty  

•  Encourage  trial  •  Create  awareness  •  Inform  •  Remind  poten%al  customers  

•  Reassure  new  customers  

•  Change  aBtudes  •  Create  an  image  •  Launch  a  new  product  •  Posi%oning  and  reposi%on  a  product  

•  Encourage  brand  switching  

•  To  support  a  distribu%on  channel  

Main  Aims  of  Promo%on  

•  The  main  aim  of  promo%on  is  to  ensure  that  customers  are  aware  of  the  existence  and  posi%oning  of  products  

•  Promo%on  is  also  used  to  persuade  customers  that  the  product  is  be:er  than  compe%ng  products  and  to  remind  customers  about  why  they  may  want  to  buy  

Promo%onal  Mix  

•  The  specific  mix  of  promo%onal  methods  that  a  business  uses  to  pursue  its  marke%ng  objec%ves  

•  The  main  elements  of  the  mix  are:  –  Advertising (offline & online) –  Sales promotion & merchandising –  Personal selling –  Public relations/publicity / Sponsorship –  Direct marketing

•  The  elements  must  be  integrated  in  a  cohesive,  consistent  and  logical  manner  

Key  Factors  Influencing  Promo%onal    Decisions  &  Strategy  

Stage  in  the  product’s  life  cycle    

Posi%on  in  the  life  cycle  will  require  different  promo%onal  methods  

Nature  of  the  product  

What  informa%on  do  customers  require  before  they  buy?    

Compe%%on   What  are  rivals  doing  ?  What  promo%onal  methods  are  tradi%onally  effec%ve  in  a  market?  

Marke%ng  objec%ves  &  budget  

What  does  promo%on  need  to  achieve?  

How  much  can  the  firm  afford?  

Target  market   Appropriate  ways  to  reach  the  target  market  segments  

Adver%sing  

•  Paid-­‐for  communica%on  • Many  different  adver%sing  media  

– TV & radio, newspapers & magazines, online, social media, cinema, billboards

•  Consumers  subjected  to  many  adver%sing  messages  each  day  =  hard  to  get  through  

• Mass  market  adver%sing  is  very  expensive  

Benefits  and  Drawbacks  of  Adver%sing  

Advantages   Disadvantages  

Wide  coverage  

Control  of  message  

Repe%%on  means  that  the  message  can  be  communicated  effec%vely  

Effec%ve  for  building  brand  awareness  and  loyalty  

OYen  expensive  

Impersonal  

One  way  communica%on  

Lacks  flexibility  

Limited  ability  to  close  a  sale  

Personal  Selling  

•  Promo%on  on  a  person  to  person  basis  •  Two  way  communica%ons  • Mee%ng  with  poten%al  customers  to  close  a  sale  

•  By  telephone,  at  mee%ngs,  in  retail  outlets  and  by  knocking  on  doors  

•  Highly  priced,  low  volume  and  highly  technical  products  rely  heavily  on  personal  selling  

Benefits  and  Drawbacks  of  Personal  Selling  

Advantages   Disadvantages  High  customer  a:en%on  

Message  is  customised  

Interac%vity  

Persuasive  impact  

Poten%al  for  development  of  rela%onship  

Adaptable    

Opportunity  to  close  the  sale  

High  cost  

Labour  intensive  

Expensive  

Can  only  reach  a  limited  number  of  customers  

Sales  Promo%on  

•  Tac%cal,  point  of  sale  material  or  other  incen%ves  designed  to  s%mulate  purchases  

•  Short  term  incen%ves  to  increase  sales  •  Some  promo%ons  aimed  at  consumers;  -­‐others  at  intermediaries  or  sales  force  

Examples  of  Sales  Promo%on  

•  Coupons  •  Money  off  •  Compe%%ons  •  Demonstra%ons  •  Free  samples  •  Loyalty  points  

•  Free  giYs  •  Point  of  sale  displays  

•  BOGOF  •  Merchandising  •  Trade  in  offers  

Benefits  and  Drawbacks  of  Sales  Promo%on  

Advantages   Disadvantages  

Effec%ve  at  achieving  a  quick  boost  to  sales  

Encourages  customers  to  trial  a  product  or  switch  brands  

Sales  effect  may  only  be  short-­‐term  

Customers  may  come  to  expect  or  an%cipate  further  promo%ons    

May  damage  brand  image  

Public  Rela%ons  (“PR”)  

Public  rela%ons  ac%vi%es  are  those  that  create  goodwill  

toward  an  individual,  business,  cause  or  product  

Main  Aims  of  PR  

•  To  achieve  favourable  publicity  about  the  business  

•  To  build  the  image  and  reputa%on  of  the  business  and  its  products,  par%cularly  amongst  customers  

•  To  communicate  effec%vely  with  customers  and  other  stakeholders  

Typical  PR  Ac%vi%es  

•  Promo%ng  new  products  •  Enhancing  public  awareness  •  Projec%ng  a  business  image  •  Promote  social  responsibility  •  Projec%ng  business  as  a  good  employer  •  Obtain  favourable  product  reviews  /  recommenda%ons  

PR  &  Sponsorship  

•  Sponsorship  takes  place  when  a  payment  for  an  event,  person,  organisa%on  is  given  in  return  some  considera%on  of  benefit  

•  A  specialised  form  of  public  rela%ons  •  Common  in  the  worlds  of  arts  and  sport  •  Sponsorship  should  benefit  both  sides  

Direct  Marke%ng  

Promo%onal  material  directed  through  mail,  email,  social  media  or  phone  to  individuals  or  businesses  

Why  Use  Direct  Marke%ng?  

•  Allows  a  business  to  generate  a  specific  response  from  targeted  groups  of  customers  

•  Allows  a  business  to  focus  on  several  marke%ng  objec%ves:  –  increasing sales to existing customers – building customer loyalty –  re-establishing lapsed customer relationships – generating new business

Benefits  and  Drawbacks  of  Direct  Marke%ng  

Advantages   Disadvantages  

Focus  limited  resources  on  targeted  promo%on  

Can  personalise  the  marke%ng  message  

Rela%vely  easy  to  measure  response  &  success  

Easy  to  test  different  marke%ng  messages  

Cost-­‐effec%ve  if  customer  database  is  well  managed  

Response  rates  vary  enormously  

Nega%ve  image  of  junk  mail  and  email  spam    

Databases  expensive  to  maintain  and  keep  accurate