Chapter 17: The Promotional Mix

Promotion in Marketing• Promotion is persuasive communication.

• Product promotion is a promotional method used by businesses to convince people to select their goods or services instead of a competitor’s brands.

• Institutional promotion is a promotional method used to create a favorable image for a business, help it advocate for change, or take a stand on an issue.

Types of Promotion in the Mix

•The promotional mix is the cost-effective combination of personal selling, advertising, direct marketing, sales promotion, and public relations strategies used to reach company goals.

•Personal selling requires sales representatives to generate and maintain direct contact with prospects and customers.

Types of promotion

•Advertising is a form of nonpersonal promotion in which companies pay to promote ideas, goods, or services.▫Ex: where do you see advertising?

•Direct marketing is a type of promotion that companies use to address individuals directly and not through a third party medium.▫Ex: direct mail, e-marketing, social media

Types of promotion• Sales promotion represents all marketing

activities – other than personal selling, advertising, and public relations – that are directed at business or retail customers to boost sales.▫Ex: coupons, money-off, samples, point-of-

purchase

• Public relations activities help an organization to influence a target audience.▫Ex: news release, community activities

Types of promotion

•Publicity involves bringing news or newsworthy information about an organization to the public’s attention.

•Can also make the public aware of people▫Ex: politics, athletes, actors, etc.

•Publicity is free, but you can’t always control the content

Concept of Promotional Mix

•How do companies establish a Promotional Mix?▫1. Identify the target market▫2. Establish objectives/goals ▫3. Design the promotional message▫4. Select promotional activities▫5. Allocate budget amounts▫6. Measure results

▫Then…..start all over again!

Push vs. Pull Promotion

•Push policies engage the retailer/distributor to “push” the product to the end consumer.

•Pull policies direct promotional activities at the consumer and hope they “pull” the product through the distribution channels

Types of Promotion

•Sales promotions are incentives that encourage customers to buy products or services.

•Fall into two general categories:▫Trade promotions▫Consumer promotions

Trade Promotions•Trade promotions are sales promotion

activities designed to get support for a product from manufacturers, wholesalers, and retailers.

•Trade promotions include:

•Promotional allowances▫Represent cash payments or discounts given by

manufacturers to wholesales or retailers for performing activities that encourage sales

Trade promotions

•Cooperative advertising▫Manufacturer helps the retailer pay for

advertising•Slotting allowances

▫A cash premium paid for a specific placement on store shelves

•Sales force promotions▫Awards given

•Trade shows and conventions

Consumer Promotions

•Coupons are certificates that entitle customers to cash discounts on goods or services.

•Premiums are low-cost items given to consumers at a discount or for free.▫Ex: toys, pens, key chains, coffee mugs

•Deals offer short-term price reductions that are marked directly on the label or package.▫Ex: price tag that reads $5.99 or 2 for $10

Consumer Promotions• Incentives are higher-priced products,

awards, or gift cards that are earned▫Ex: Kohl’s cash

•Product samples are free trial-sized products▫Ex: toothpaste from your dentist

•Sponsorship is when a company pays a fee for rights to promote itself or its products or services at an event, at a physical site, with person, etc.▫Ex: NASCAR, football stadium, Aaron Rodgers

Consumer Promotions

•Promotional tie-ins are activities that involve sales promotions between one or more retailers or manufacturers.▫Disney toys in Happy meals

•Product placement is a consumer promotion that involves the verbal mention or appearance of a brand-name product in a television series, movie, or sporting event.▫American Idol: Ford Focus, Sprint Nextel

Consumer Promotions•Loyalty marketing programs reward customers

by offering incentives for repeat purchases▫Ex: grocery store cards

•Online loyalty marketing programs▫Ex: earn points for buying from specific websites

•Point-of-purchase displays are displays designed primarily by manufacturers to hold and display their products.▫Usually located at end of aisles or near

checkouts▫Kiosks are a special style of Point-of-purchase

•Questions??