Allen Independent School District / Overview



PROMOTION IN MARKETINGPromotion?is one of the four Ps of the Marketing Mix (Product, Place, Price, & Promotion). As such it is any activity that helps in the exposure or sale of a product. Promotion is persuasive communication. Companies use promotional techniques to enhance their public image and reputation, and to persuade people to value their products. Nonprofit and charitable organizations rely on promotional activities to educate the public about an issue or cause. They also use it to advocate for changing laws or policies. The goals of promotional activities are summarized by the phrase for the acronym AIDA—first attract Attention, then build Interest and Desire, and finally ask for Action.As You ReadContrast?Distinguish between the different types of promotion.Product promotion?is a promotional method used by businesses to convince prospects to select their goods or services instead of a competitor's brands. Promotional activities explain the major features and benefits of the product, identify where it is sold, advertise sales, answer customer questions, and introduce new offerings. Product promotion also helps businesses foster good relations with existing customers. These positive relations enhance customer loyalty.“Companies?use promotion to build awareness?and inform people about their products.”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 trade or community issues. As part of institutional promotional efforts businesses maintain Web sites to provide news, product and general information, and to answer questions. Institutional promotions do not directly sell a product. However, these activities do build goodwill to enhance a company's reputation and foster a favorable image for the company. This image may also help sales efforts.Reading CheckRecall?What are two types of promotion?Promoting a BusinessInstitutional promotion is an important type of promotion.?How does endorsement by a research company benefit a business?Page 396TYPES OF PROMOTION IN THE PROMOTIONAL MIXThe?promotional mix?is the cost-effective combination of personal selling, advertising, direct marketing, sales promotion, and public relations strategies used to reach company goals. Each of the five basic categories in the promotional mix plays a vital role in promoting businesses and their products.Through advertising, direct marketing, sales promotion, and public relations, companies communicate with customers in many ways other than direct contact. Personal selling, on the other hand, requires direct personal contact with the customer.PERSONAL SELLINGPersonal selling requires sales representatives to generate and maintain direct contact with prospects and customers. Direct contact like this can take the form of personal meetings, in-home demonstrations, e-mail and telephone correspondence.Personal selling is one of the most expensive forms of promotion. Typically, personal selling takes place after other promotional activities have been tried.ADVERTISINGAdvertising?is a form of nonpersonal promotion in which companies pay to promote ideas, goods, or services. These promotions are presented through a variety of media outlets.Advertising can be found everywhere, on billboards, business cards, brochures, Internet, magazines, newspapers, phone directories, grocery store receipts, radio, television, sports arenas, cars and buses, restaurant menus, and Web sites. With advertising, a company engages in a one-way communication to the customer and prospective customer.DIRECT MARKETINGDirect marketing?is a type of promotion that companies use to addresses individuals directly and not through a third party medium (such as television, radio, or the Internet). One traditional form of direct marketing is direct mail, which is sent?via?standard mail to a home or business. Another form is telemarketing in which customers are called on the phone and asked directly for goods or services.Direct marketing is a special type of advertising.?How does direct marketing differ from advertising?Page 397Promotions are also done through e-marketing to reach consumers who use the Internet to shop and research information. E-marketing is any promotion that is delivered via the Internet. It includes search engine marketing (paid search), Web site optimization, e-mail marketing, mobile phone applications (apps), and the use of social media.Social media?is electronic media that allows people with similar interests to participate in a social network. Social networks, such as Facebook?, MySpace?, LinkedIn?, YouTube?, and Twitter?, help businesses reach prospective customers.The goals of direct marketing are to generate sales or leads for sales representatives to pursue. Direct marketing gives recipients an incentive to respond by visiting a store or Web site, calling a toll-free number, returning a form, or sending an e-mail. Targeted customers receive special offers or incentives, such as money-off coupons, limited-time sales, special merchandise offers, loyalty points for future purchases, and free delivery.Both print and electronic direct marketing allow a business to engage in one-way communication with its customers about product announcements, special promotions, bulletins, customer inquiries, and order confirmations. However, as a result of consumer complaints about unwanted electronic direct mailings, Congress passed the CAN-SPAMAct of 2003. This act requires senders of unsolicited commercial e-mail to give recipients a way to opt out of e-mails. It also prohibits the use of deceptive subject lines and headers. In addition, it requires businesses to provide valid return addresses on their e-mails.The Federal Trade Commission banned many pre-recorded, automated telemarketing solicitations, or “robocalls,” in 2009. However, certain automated calls from charitable organizations, politicians, and healthcare providers are permitted. Telephone calls made by humans for selling products and services are also allowed unless the phone number is listed on the National Do Not Call Registry.SALES PROMOTIONAccording to the American Marketing Association (AMA),?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. Sales promotions include coupons, money-off promotions, competitions, product samples, and point-of-purchase displays. The objectives of sales promotions are to increase sales, inform potential customers about new products, and create a positive business or corporate image.Electronic Appeal?An e-mail message costs about $7 per response versus $48 for traditional direct mail.PUBLIC RELATIONSPublic relations?(PR) activities help an organization to influence a target audience. Public relations campaigns try to influence general opinion and create a favorable public image for a person, organization, or a company, its products, or its policies. An example is a campaign to encourage business to sponsor the Children's Miracle Network, a national network of children's hospitals. Sponsors are featured in publications, print ads, mentioned during radio fund-raisers, and also help distribute paper miracle balloons for customer donations at local outlets. Public relations staff try to cultivate a positive image with reporters who may cover a specific industry.Page 398FIGURE 17.1News ReleaseStep-by-Step Directions?News releases sent through postal mail to the media should be double-spaced and typed on letterhead stationery. Margins should be about one-and-one-half inches to allow the editor to make notes. Always submit copy that is clean, legible, and free of spelling errors. News releases published on a Web site are limited by the design of the Web page, but must also identify the company and follow the rules listed below.?What kind of news goes in a news release?Page 399WRITING NEWS RELEASESAlthough there are many media tools, one of the most important ones is the news release. A?news release?is an announcement sent to the appropriate media outlets (see?Figure 17.1).The release announces newsworthy developments about a company's goods or services, distribution channels, facilities and operations, partners, revenues and earnings, employees, and events.As you can see from the figure, there are many parts of the news release that do not change. It is important for companies to format their news releases correctly. This format makes it easier for the audience to find and use information.USING SOCIAL MEDIABusinesses also use social media to interact with customers and get feedback on the company, its products, and services. People communicate and maintain a degree of personal control through the Internet, cell phones, and input devices. Social networks provide businesses with a way to obtain opinions and speak directly with potential and existing customers. The potential to reach prospective customers is tremendous. For example, Facebook allows businesses and organizations to create unique profiles, sign up fans, send messages, and create status reports. Businesses can reach more than 400 million users on Facebook.PUBLICITYThrough news releases and social media, businesses gain publicity.Publicity?involves bringing news or newsworthy information about an organization to the public's attention. This process is known as placement.In addition its use by businesses, publicity can also make the public aware of certain people, specific products or services, efforts by nonprofit or government agencies, and arts and entertainment opportunities. A public rally for a political issue or candidate is aimed at raising publicity among voters at election time. When a recording artist is interviewed on the radio, that singer or band is trying to publicize their music.A publicity campaign can be launched to achieve various goals. The main function of publicity is to develop a positive perception or awareness of the organization and its products in the marketplace. The right kind of publicity can create and maintain a company's positive image. However, negative publicity can devastate it. People like to do business with respectable companies. Companies engage in such image-building activities as sponsoring cultural events, awarding scholarships, and donating money, land, or equipment for public use.Unlike advertising, the placement of publicity is free. For example, a one-minute story on the evening news about a company costs nothing. However, a few seconds of advertising time on the same broadcast can cost thousands of dollars.Cost is not the only advantage of publicity. Newspapers, television and radio news programs, and customer-generated responses through social media are usually viewed as more objective than advertisers. People are more likely to pay attention to and believe news stories and customer feedback than advertisements. Publicity might appear as a media story or as part of a larger story or report. These formats make the information appear more credible to many people.The disadvantage of publicity is that its content, unlike paid advertising, is not controlled by the business that issues it. The media select the context and story angle and decide when and how to present the content.Short-post forums on Twitter, YouTube videos, and customer-generated online opinions on social networking sites can quickly spread negative or unverified stories. This kind of negative publicity is likely to get as much attention as positive stories about company products or community contributions. Businesses work to generate positive publicity and avoid negative publicity through effective public relations.Reading CheckRecall?What are the major types of promotion in the promotional mix?Page 400FIGURE 17.2Developing a Promotional MixStrategies to Reach the Goal?The promotional activities that marketers choose for promoting a particular product form the promotional mix.?How do the elements in a promotional mix work together?Page 401THE CONCEPT OF PROMOTIONAL MIXMost businesses use more than one type of promotion to achieve their promotional goals. They use a cost-effective mix of promotional strategies that include advertising, selling, sales promotion, direct marketing, and public relations strategies. This mix assures them that their product will be widely recognized.Once a product is recognized, it is easier to sell. These sales generate revenue for the company. It uses this revenue to offset the cost of using the promotional strategies. Companies learn which strategies are most effective in their promotional mix through this process.How do companies develop a promotional mix? A business establishes a promotional mix by following a process that begins with identifying thetarget?market. This process continues through a series of steps and ends with the company measuring the results of the mix.?Figure 17.2shows the process in developing a promotional mix. It is represented as a cycle because a promotional mix must be on-going and continuous. The strategies in the mix are designed to complement one another. Information that is learned in one cycle of the mix is applied to the next cycle.MARKETING CASE STUDYLadies and Gentlemen & The Beatles: Rock Band!?The popular music video game Rock Band??got a high-profile reintroduction with “The Beatles: Rock Band.” In this game, players take on the roles of the Fab Four. It was not only the first Beatles game, it was also the first time the band's music became available in digital format. This allowed for some special advertising opportunities.From Liverpool to YouAds for the game utilized artful images from the game itself. The game features colorful animations of the band and how the musicians changed over time. A commercial also showed everyday people inserted into iconic parts of Beatles imagery. One ad showed people walking across Abbey Road. The promotion also referenced the new Beatles boxed CD sets, which were released at the same time as the game.English Language ArtsCollaborate?With a partner, create a basic promotional mix for this product, incorporating creative, nontraditional ideas. Present your ideas to the class using presentation software or poster boards.NCTE 12?Use language to accomplish individual purposes.Page 402For example, the process starts with a target market. Imagine that you work for a company that designs, manufacturers, and sells hiking equipment. It has national name brand recognition. Your company plans to introduce a totally new and improved lightweight backpack. Since your objectives are to introduce a new product, build awareness and create sales, your message must reach hikers and outdoor enthusiasts about the benefits of buying your new product. Your promotional mix must include methods for meeting all of these goals.The marketing department selects the best promotional activity to reach the target market. It then develops a budget for advertising, direct marketing, and sales promotional activities. The selected promotional activities must complement one another, and they must be able to reach the potential market. They must also be realistic in terms of the budget for the promotion.Advertising and direct marketing create awareness of a business's product. At the same time, public relations helps cultivate a favorable image and brand recognition. Sales promotional activities stimulate sales, reinforce advertising, and support selling efforts. Finally, personal selling builds on all of these previous efforts by completing the sale. Your company's budget will give you an idea of how to fund each of these areas of promotion.Elements of the promotional mix must be coordinated. For example, national advertising should be reinforced by local promotional efforts. Many consumer product manufacturers give or sell retailers decorations or in-store displays to reinforce a national campaign. The national and local efforts need to be communicated to the store personnel. Being made aware of any coupons, rebates, contests, and featured promotional items allows staff to encourage customer participation.When promoted products are not available as advertised or the selling staff is uninformed about a promotion, sales are lost and customers are dissatisfied. If these employees are informed of such promotions, they will be able to more effectively engage their customers. This engagement leads to more sales and more revenue.The total promotional mix and each strategy in the mix must be measured on how well they met the objectives. The results determine whether promotional strategies are revised, improved, or discontinued.PROMOTIONAL BUDGETIn large companies, the marketing department has many roles. It determines the promotional mix, establishes the budget, allocates resources, coordinates the campaign, supervises any outside resources, and measures the results.It is important to consider all aspects of the promotional mix when developing the promotional budget. Determining the ideal budget is difficult. Often, a promotional budget is based on a percentage of sales. Other times, it is based on an estimate of what competitors spend on advertising, direct marketing, and sales promotion. There is no precise way to measure exact results of spending promotional dollars. This lack of precision makes it difficult to determine the ideal amount for the promotional budget. Its overall success is usually based upon whether the total effort led to increased sales.It is vital for companies to study the effects of their promotional mix. It is like an experiment. They need to isolate a variable and monitor its effects. After the promotion is done, the company can assess the impact of the promotion and make a plan for the next time around.Page 403THE PUSH-PULL CONCEPTManufacturers often develop a promotional mix for each segment of the distribution channel. To promote a product to large retailers that sell its products, a manufacturer might want to use a mix of advertising, personal selling, and trade discounts. This type of promotion, known as the?push policy,?is used with partners in the distribution channel. The manufacturer pushes the product through the distribution channel to the retailer. The main purpose of the promotion is to convince a retailer to stock the products being promoted.This strategy is especially useful at trade shows and exhibitions, where cross-promoting is possible. It is a helpful strategy for manufacturers whose products do not have strong brand identity.The same manufacturer might use a different promotional mix of local and national advertising, in-store displays, sales promotion, and public relations to reach consumers. The?pull policy?directs promotional activities toward consumers. The idea is to entice (or pull) the consumer into the store (or Web site) to buy the product. A typical pull marketing strategy would be to offer “half-off” deals or clearance sales.This pull policy of promotion is designed to create consumer interest and demand. Consumer demand pulls the product through the distribution channel by encouraging wholesalers and retailers to carry a product. As mentioned, this strategy relies heavily on consumer advertising, premiums, samples, in-store displays, and demonstrations.After You Read?Section 17.1Review Key ConceptsExplain?why promotion is an important marketing function.Identify?when to use product and institutional promotion.Contrast?the push and pull policies in promotional mixes.Practice AcademicsSocial StudiesCustomer-driven responses on Web sites, such as Facebook?, MySpace?, and Twitter?, are changing the way businesses promote goods and services. Investigate the concept of social media and its affect on business. Write a paragraph on how business responds to customer-driven comments.MathematicsAn outdoor apparel company has established a promotional budget of $1,000 to be spent in the following manner: $300 for a print advertisement in an outdoor magazine; $450 for an online advertisement campaign; $150 for premiums (decal stickers imprinted with the company name); $100 donation to a local outdoor program for children to build public relations. What percentage of the total budget is spent on each promotional category??Number and Operations?Estimate before computing your answer to be sure your calculations are accurate.Starting Hints?To solve this problem, divide each dollar amount spent by the total dollar amount of the promotional budget, $1,000, to get a decimal. Multiply the decimal by 100 to determine what percent of the budget each category requires.For help, go to the?Math Skills Handbook?located at the back of this book.NCSS V B Individuals, Groups, & Institutions?Analyze group and institutional influences on people, events, and elements of culture in both historical and contemporary settings.NCTM Number and Operations?Compute fluently and make reasonable estimates. ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download