What’s it: Promotion is a marketing effort to increase public awareness, stimulate people to buy, and increase sales. It may be for product, brand, or company itself.
Promotion combines any communication between a business and a potential customer. Advertising is one-way businesses create publicity, apart from special offers, sponsorship, and public relations.
Promotion is important to highlight the product position, create product image, build consumer awareness, and educate about its benefits.
The difference between promotion and advertising
Advertising and promotion are different. Specifically, advertising is one part of the promotion. Apart from advertising, companies may also use various other channels to promote products and convey their messages to customers, such as public relations, sales promotion, and personal selling. Overall, we refer to these variations in the marketing mix.
Marketing promotion objectives
The three general objectives of promotion are:
- Inform. Promotion seeks to inform audiences about a product. Information may be about the existence of a new product, new usage of the existing products, changes to product features, or explaining how a product works.
- Persuade. Through promotion, companies try to persuade people to buy products and move away from competitors’ products. Companies design it to shape and influence consumer choices. They seek to change customer perceptions of the product and convince customers that the product is better than competitors’ products. That way, not only does it stimulate people to buy, it’s also to divert away from competitors’ products.
- Remind. Through promotions, the company reminds buyers that a fixed product is still available for purchase. They also tell consumers where to buy. When adding new features, they try to notify them through promotions.
And specifically, promotional activities have various purposes such as:
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- Informs about existing and new products
- Describe product features and benefits
- Persuade customers to buy products
- Tells where customers can buy
- Distinguish the company’s offerings from competitors’ offerings
- Increase sales
- Building a positive public image and perception
- Informs about companies, brands, and their various offerings
- Remind customers about a product
Promotion combines several different methods, such as advertising, personal selling, public relations, and sales promotion. We all refer to them as the promotion mix.
- Advertisement. The company pays an advertising agency to convey messages about itself or its offerings in the media. Advertising is non-personal because messages reach large numbers of people without having to communicate with them directly. There are various advertising media, including television, magazines, newspapers, billboards, online, and radio.
- Sales promotion. Its goal is to encourage customers to buy now rather than later. To do this, companies can combine techniques such as point of sale views, free gifts, samples, coupons, or buy one get one free.
- Personal selling. The company uses face-to-face communication. They employ salespeople to make direct contact with customers.
- Direct marketing. Companies make contact with individual consumers using tactics such as mailshots.
- Public relations. The company builds good relations with the public to get positive opinions and perceptions. Companies can take various channels, such as press conferences and press releases. Free media coverage, such as at a new product launch, is another example.
- Sponsorship. The company provides support or resources to sponsor activities or events such as sports. Such support may be financial or through the provision of a product or service. Unlike advertising, in this case, the company does not communicate specific product attributes.
- Social media. Through social media, companies can interact with potential customers. They can promote new products or special offers. Companies may also direct customers to their online stores.
There is no one-size-fits-all promotion mix. Combining the various methods is important because each has different exposures. Finally, the selection of the right promotion channel influences the company’s marketing and sales success.
Some methods may be effective for certain types of businesses, but not for others. For example, personal selling may be more effective at persuading and providing detailed information for a luxury item. For mass products, companies use advertisements in the mass media because they reach more potential customers.
Apart from the effectiveness of each method, the company considers the market size and available resources. Big businesses have the resources to use national advertising. On the other hand, small companies with limited resources and targeting the local market can opt for simple promotions, such as leaflets.
Based on the objectives, the promotion strategy is divided into two groups, namely:
- Pull promotional strategy. In this case, the company targets the end consumers to encourage them to buy products.
- Push promotional strategy. This strategy targets intermediaries (distributors and retailers). Its purpose is to encourage them to promote, shelf, and sell products to end consumers.
Meanwhile, based on the level of company control, promotions are divided into two groups:
- Above the line promotion. In this case, the company has no direct control over the target audience and pays to use the promotional space. Examples are advertising on television, ratio, magazines, and newspapers.
- Below the line promotion. The company has direct control over promotions and can communicate with customers without paying for the media. Examples are sales promotions such as coupons and buy one get one free.
Factors affecting the choice of promotion method
Promotion is a critical determining factor for the success of a marketing program. Companies may design products that are of high quality and able to satisfy consumers. But, if some potential customers have never heard of it and are unaware of the product’s presence, will they buy?
Through promotion, companies try to build awareness, interest, and persuade customers, for example, through advertising. They package and design advertisements as attractive as possible by presenting information and product benefits. They hope consumers are willing to buy the product.
Promotion is an integral part of the marketing mix. Several factors influence the choice of promotional methods, including:
- Promotion purpose. If the company wants to reach a broad audience, advertising is the right choice.
- Types of products. Industrial products require a more personal approach. Meanwhile, consumer products usually require more advertising.
- Company infrastructure and resources. Each promotion method requires different costs and efforts. Companies may spend more money on advertising if funds are sufficient. However, if funds are insufficient, as in most small companies, they are dependent on personal selling.
- Product life cycle. For example, companies adopted intensive advertising and personal selling during the introductory phase to educate and raise product awareness. Once consumers are aware, companies may focus more on advertising.
- Distribution infrastructure. When selling products directly to customers without going through intermediaries, companies rely on personal selling. The company may use some advertisements, but that is only for support.
- Market size. If the company targets a more specific customer base, direct selling alone will suffice. However, if it targets a mass market with large market size, advertising is a promotional tool.
- Pricing strategy. Premium products, such as the iPhone, rely less on mass media advertising. Companies will usually prefer a more personal promotional approach, such as personal selling.
Effects of the business cycle on the promotion strategy
Companies adapt their promotional strategies to the product life cycle. Each life cycle stage requires a different promotion approach.
At the introduction stage, the company strives to inform and educate potential customers. Most customers either do not know or are unaware that a product can meet their needs. Therefore, the company’s first task is to build awareness among consumers.
In the growth stage, consumers begin to become aware of the product and its benefits. Products sell well, and middlemen are happy when the product is available on their shelves. At this stage, the company directs a promotional strategy to stimulate selective demand (brands) and divert customers from competitors.
During the mature stage, market competition increases, and the sales curve begins to level out. Promotion strategy seeks to persuade customers to continue to buy, for example, by highlighting new features of the product. Long story short, the purpose of promotion is to create loyalty. That usually requires a fairly substantial marketing budget.
Furthermore, companies usually start reducing costs, including promotions, during the decline stage. Companies try to maximize sales of products and minimize costs before the product disappears from the market.
However, if the company adopts an extension strategy, the promotion may still be vigorous. They are trying to revive the product.