4.5 Promotion

Aims: (AIDA)• Arouse awareness• Generate interest• Inspire desire• Initiate adoption

• of the product

Definition:• It refers to the methods

used by businesses to make customers aware of a product and adopt it.

• It brings customers from a state of unawareness of the product to a state of adopting it.

Elements of promotion:

Above the line (pull) promotion

• AdvertisingBelow the line (push) promotion

• Sales promotion• Publicity• Sponsorship• Personal selling• Exhibitions and trade fairs• Direct mailing• Merchandising• Public relations

Above the line promotion• Above the line promotion refers

mainly to advertising. It refers to methods over which a firm has no direct control and makes use of external agencies or media.

• It allows the business to reach a wide audience and attract or ‘pull’ them into buying the product.

• That’s why it is also referred as pull promotion.

Below the line promotion

• This refers to any promotional activity which is not advertising.

• It refers to methods over which the firm has direct control and do not use external agencies or media.

• The business pushes the product towards targeted customers – push promotion.

Advertising • Informative, i.e. make consumers aware of the product specially new ones and give them some information on the product

• Persuasive, i.e. convince consumers to buy a product because it is more desirable than others

• Reassuring, i.e. reminding consumers that their purchases were correct and they should continue to buy the product

Advertising is a non- personal form of persuading customers to buy a product. It is mostly done above the line. 

3 objectives:

Main types of advertising

• Press• Television• Radio• Outdoor (Billboards• Internet

The press: newspapers and magazines

• The press is the most important medium of advertising in terms of expenditure. The press consists of daily and Sunday newspapers and magazines which are mainly periodicals (weekly, monthly, etc.).

• Advertising in periodical magazines is normally of a specialist nature to target a market segment , e.g. cars, musical instrument, etc.

• Small businesses often use local newspapers.

Adv. and disadv. of using the press

• Advantages:• It is permanent. The

advert can be cut and kept for future reference.

• More information can be provided than in TV or radio advertising

• Disadvantages:• It suffers from a lack of

impact when compared to TV advert

Television advertising

This is mainly used by big firms who can afford the high price of a TV slot. Sound and moving pictures can bring powerful message in a very short time to the viewer

Advantages: It can have a very powerful impact on the viewers.A very wide and even global audience can be targeted

Disadvantages:It is very costly to produce a television slot and hence very expensive for businesses to buy advertising slot.

Radio advertising

This refers to advertising using radio time slots. It is the fastest growing advertising medium. There is an increasing number of people listening to radio. The number of independent radio stations and internet radios is constantly increasing.

Advantages:Radio advertising can reach a very large audience and yet cheaper than television a greater number Listeners can do other things while exposed to the promotionsWith internet technology, radio promotions can reach almost anyone In the world

DisadvantagesThere is no visual impact with the absence of moving imagesThere is lower attention level than with television promotion

Outdoor advertising (Posters, billboards, etc)

Outdoor advertising refers to the use of billboards, posters, banners to promote a business, a product or brand name. These appear on a variety of locations (shopping malls, road sides, vehicles, etc.) where they are visible to large number of people. They tend to be large with short messages as passers-by or motorist have a few seconds to look at.A recent development is the use of electronic screens with rotating advertisements.

AdvantageIt can be seen repeatedlyThere is a high rate of exposure

DisadvantageIt contain a limited amount of informationProne to damage, vandalism and grafiti

Internet advertising

This refers to advertising using (firm’s) own websites , networking websites or other electronic sites.It is the advertising medium which is growing at the fastest rate. More and more businesses have their own websites and are selling on line.

AdvantageWebsites can be accessed worldwide by consumers

DisadvantageThe audience is limited to internet users

Below the line promotion

• This refers to any promotional activity which is not advertising.

• It refers to methods over which the firm has direct control and do not use external agencies or media.

• The business pushes the product towards targeted customers – push promotion.

Sales promotion

Sales promotions are incentives offered to consumers to encourage them to buy goods and services. Examples include:

Free samples Temporary discounts or discount vouchersGifts in exchange of product labels or buy one get one free Products give rights to enter into competition with major prizesAfter sale guaranteeLoyalty cards or loyalty gifts

AdvantageSales promotion can boost up sales although temporarily

DisadvantageThe free samples, gifts, etc. reduce profits

Public relations

This refers to the business communicating with the public to improve its image or products. Such exercises include:

Press conference where journalists are invited to a presentation and are given information about the company or products.

Press release, that is, written statement of events, activities or products which may be considered newsworthy.

Packaging promotion

• This refers to the additional information on the product on the protective packaging.

• It also refers to promoting the business name on carrier bags provided by many retailers.

Sponsorship

This involves providing funds for the conduct of an event, mostly sporting events (e.g. Coca Cola for the Olympic Games in Beijing).It also involves supporting teams or individuals athlete. Other forms of sponsorships take place in the community, the cultural and educational world

Merchandising/point of sales promotion

Merchandising is an attempt to influence consumers at the point ofconcluding sales by proper display of products. The aim is to make consumers buy what they can see at the point of sale rather than from a sales assistant.

Supermarkets , petrol stations and banks use this method extensively. Whilst customers are waiting in line, they are exposed to items suchconfectionary, magazines, insurance, etc.

Other features of merchandising used to attract customers to buy other things they had not intended to buy include: giant posters, taste the product, soft music, announcement, etc.

Publicity

Publicity is the process of promoting a business or product by getting media coverage without directly paying for it. Although the publicity is free, it is the result of a patronage of sports, arts or learning. For example, giving a Ferrari to a celebrity may result in a wide coverage of the car.

AdvantagePublicity generates favorable coverage for a product or business DisadvantagePublicity is the result of patronage which involves costs.

Direct marketing or personal selling

Direct marketing occurs when a firm’s salesmen promote a product through personal contact. This can be done over the phone, by sending e-mails or by knocking at the doors. It is often used for industrial goods (airplanes, plants and machineries), properties, insurance, financial planning, etc.

AdvantageIt enables explaining technical aspects of a productOrders can be obtained

DisadvantageThe cost of maintaining a team of sales representatives can be expensive

Fairs and exhibitions

These are mainly used where there is a need to demonstrate a product or to discuss the technical aspects of the product with customers.

Advantage They give a chance to show how a product actually worksThey allow customers to discuss about a product

Disadvantage Staff have to be remove from work to be available on spot

Direct mail

This is a bit different from direct marketing. Here information is sent to the customers through the post or e-mail with the option of placing an order. it is used by mail order business, local food outlets, bookshops, etc.

AdvantageA wide audience can be reached and it is relatively cheap

DisadvantageMany people disregard the materials posted or block such e-mails

Word of mouth

Word of mouth promotion refers to the spreading of information about a product from one person to another through oral communication. When the message is transferred electronically it is known as P2P (peer to peer)

Advantages It is the cheapest form of promotion as there is no cost to the firm .

DisadvantageIt can be damaging if the wrong information is spread

Promotional mix

Promotional mix refers to the range of promotional methods used by a business. A business usually uses different methods to promote its products. There are a number of factors the will influence the mix and these include:

The type of the productThe type of the marketThe cost The promotional mix of competitorsThe product life cycle