- Promotion Program
Promotion
is all about communication. Why because
promotion is the way in a business makes its products known to the customers,
both current and potential.
The
main aim of promotion is to ensure that customers are aware of the existence
and positioning of products. Promotion is also used to persuade customers that
the product is better than competing products and to remind customers about why
they may want to buy.
It is
important to understand that a business will use more than one method of
promotion. The variety of promotional methods used is referred to as the
promotional mix.
Group promotion objectives fall into three categories:
- · To Inform
- · To Persuade
- · To Remind
A. Informative promotions aim
to alert the market about a firm's products, especially new ones. It is
commonly used when promoting existing products that have been updated
B. Persuasive promotions aim to encourage customers to make purchase, to switch from rival brands and to create loyalty for the product or brand. Persuasive promotion is highly competitive when there are similar products in the marketplace, and products are competing for their share of the market. In this situation, the winning product will differentiate itself form the competition and possess benefits that are superior to, or compete strongly with, the competition. Comparative approaches are common place, either directly or indirectly.
C. Reminder promotion are used to retain customer awareness and interest of an established product.Reminding customers about a product or service is just as important as an initial product introduction. Something as simple as setting up an in-store display with coupons or having customers complete a survey to indicate how often they use the product keeps brands fresh in cunsumers’ minds.
What
is Promotion?
Promotion is
one of the market mix elements,
and a term used frequently in marketing. The specification of five promotional mix or
promotional plan. These elements are personal selling, advertising, sales
promotion, direct marketing, and publicity.[1] A
promotional mix specifies how much attention to pay to each of the five
subcategories, and how much money to budget for each. A promotional plan can
have a wide range of objectives, including: sales increases, new product
acceptance, creation of brand equity, positioning,
competitive retaliations, or creation of a corporate image. Fundamentally, however there are three basic
objectives of promotion. These are:[2]
1. To
present information to consumers as well as others.
2. To
increase demand.
3. To
differentiate a product.
These communication tools serve as tactics within the
promotional plan to accomplish objectives such as:
·
Increasing
sales
·
Launching
new products
·
Creating
and building brand equity
·
Establishing
market positioning
·
Retaliating
against competition
·
Strengthening
brand image
As organizations implement their promotional plan, they also
seek to educate consumers, increase consumer demand, and differentiate their
products and services in the marketplace .
What is Sales Promotion?
Sales
promotion is one level or type of marketing aimed either at the consumer or at
the distribution channel (in the form of sales-incentives). It is used to
introduce new product, clear out inventories, attract traffic, and to lift
sales temporarily. It is more closely associated with the marketing of products
than of services. The American Marketing Association (AMA), in its Web-based
"Dictionary of Marketing Terms," defines sales promotion as
"media and nonmedia marketing pressure applied for a predetermined,
limited period of time in order to stimulate trial, increase consumer demand,
or improve product availability." Business pundits and academic students
of business have developed almost fancifully sophisticated views of sales
promotion. In down-to-earth terms it is a way of lifting sales temporarily by
appealing to economic motives and impulse-buying behavior. The chief tools of
sales promotion are discounts ("sales"), distribution of samples and
coupons, the holding of sweepstakes and contests, special store displays, and
offering premiums and rebates. All of these techniques require some kind of
communication. Thus sales promotion and advertising are difficult to
distinguish.
The need
for promotion arises from the intensity of competition. Sellers must somehow
attract customers' attention. In the open markets of old (and farmers markets
of today), sellers did and do this by shouting, joking with customers, and
sometimes by holding up a squealing piglet for everyone to see. Priya Raghubir
and his coauthors, writing in California
Management Review, identify "three faces"
of consumer promotions: these are information, economic incentive, and
emotional appeal. Information may take the form of advertising the availability
of something, incentives are offered in the form of discounts, and emotional
appeals are made by displays and, of course, by the low price itself.
Precisely
because sales promotions must provide incentives—whether
to the distribution channel, the company's own sales people, or to the
consumer—they cost money by definition and must produce additional volume to
pay for the expenditures. A grand sale that clears out the inventory but, with
added advertising costs factored in, reduces margin too is—a failure. Sales
promotions therefore must be carefully calibrated to achieve the purpose.
Holding promotions too frequently will habituate customers to buy only when
promotions are in effect. Avoiding promotions altogether will let competitors
draw customers away. Alas, business never fails but to challenge the
participant.
Sales
promotion may be referred to as 'Below the line' promotion because it does not
use the media, or 'Point of sale' promotion because it is used at the point of
sale. Some common sales promotion methods include
·
Price reductions / Discounts involve reducing the price of a product (for example using
coupons), to encourage customers to buy it.
·
Gifts can be free objects that
are given to a customer when they purchase the product, or buy-one-get-one-free
(BOGOF) offers.
·
Point-of-sale displays make the product stand out from others through the use of a
special display where it is being sold. These are often seen in supermarkets.
·
Credit may be given on some
products, which allows the customer to buy the product now and then pay for it
later.
·
After-sales service is given on some products
in order to reassure the customer that if anything goes wrong, help will be
given.
Why do we need promotion?
The key factor here is the point
that promotion is done about factors that are traded for real cash, and anyone
who wants to offer something wants to create some benefit on it, and that is
why promotion is done. Didn't get it? Study on.
When you think of promotion, what is
it that first comes to mind? More likely than not, it will be symptoms. The
signboards, the automobile symptoms, the promotion banner ads, and a whole lot
more. And who places up these symptoms, after all? Apart from the apparent
response that the signmakers do it, it is the big organizations and
organizations that put up the most symptoms in promotion. The greatest objective
of these organizations, of any organization, for that issue, is to benefit.
The key reason for implementing any kind of sales promotion
activity is identifying a specific marketing need that can be addressed most
effectively by promotional activity.
This specific marketing need will fall broadly into either
of the two following categories, both of which drive volume.
Trial
Getting consumers to use your product or service for the
first time
Loyalty
Increasing the probability of a consumer who has used the
product or service before buying it again.
They are different to other marketing requirements because
they represent a specific call to action. In contrast, brand awareness is not a
specific call to action. If brand awareness is an objective over say, trial,
then your needs may be better served by using advertising.
Promotional activity operates most often in partnership with
other marketing activity. Typically this will be advertising but may also
include direct mail, public relations or sponsorship campaigns. Advertising
acts mainly to build awareness and imagery of the product's key attributes –
brand values.
Other elements of the marketing mix will also help to
develop brand values and sales promotion is no exception to this.
The advantages
However, sales promotion has some advantages over
conventional advertising, which are particularly relevant to the smaller
business.
· Promotional
activity can be targeted to a greater degree than other forms of advertising.
· Promotions
can be timed and results viewed over a more specific and much shorter timeframe
than conventional advertising.
· Perhaps
most importantly, promotional campaigns can be quantified relatively easily and
as results are more readily available, activity can be accurately evaluated.
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