The Marketing Mix: Promotion

Why is the promotion of a product an important part of the marketing mix?

• Promotion is where marketing activities aim to raise customer awareness of a product or brand, generating sales and helping to create brand loyalty.
• Promotion is the part of the marketing mix that helps educate the customer about the product being sold.
• Promotion helps consumers identify and distinguish a brand or product in a competitive market.

What are the Aims of Promotion?

1. Informing customers about a new product as promotions helps increase awareness among customers of a new product, this could lead to attracting customers and potential customers.
2. Persuade customers to buy the product one of the primary aims of promotion is to persuade customers to buy the product, this is often done by showing the customers the benefits of purchasing the product
3. Create a brand image because the promotion of a product is often an important part of the Brand image product of a business. Elements such as jingles and logos are often used in promotion.
4. Increase sales and market share as promotion educates the customers about the product and why they should buy it, this would lead to the product being sold.

Types of Promotion

1. Advertising: This is the line promotion. Paid-for communication with potential customers about a product to encourage them to buy it, which uses printed and visual media like television, radio, newspapers, magazines, billboards, flyers, cinema, etc. Advertising can be both informative and persuasive.
2. Sales Promotion: Sales promotions involve below-the-line promotion. Reductions in prices, buy one get one offer, and other benefits for the consumers that are usually held for short periods of time. Sales promotion is persuasive.
3. Below-the-line promotion: This is where a business pays not to communicate with potential customers but increases the incentive to buy a product such as a price reduction.
4. Sponsorship: Payment by a business to have its brand associated with a particular event or event or association. For example, Hyundai sponsors the Spanish Football Club Atlético Madrid.
5. Direct Mail: also known as mailshots, printed materials like flyers, newsletters, and brochures which are sent directly to the addresses of customers.

Advertising

Advertising is paid for communication with potential customers about a product that encourages them to buy it.

What affects promotion decisions?

• Stage of product on the PLC: different stages of the PLC will require different promotional strategies; see above.
• The nature of the product: If it’s a consumer good, a firm could use persuasive advertising and billboards and TV commercials. Producer goods would have bulk-buy discounts to encourage more sales. The kind of product it is can affect the type of advertising, the media of advertising, and the method of sales promotion.
• The nature of the target market: a local market would only need small amounts of advertising while national markets will need TV and billboard advertising. If the product is sold to a mass market, extensive advertising would be needed. But niche market products such as water skis would only need advertising in special sports and lifestyle magazines.
• Cost-effectiveness: the amount of money put into promotion (out of the total marketing budget) should be not too much that it fails to bring in the sales revenue enough to cover those costs at least. Promotional activities are highly dependent on the budget.

Types of Sales Promotion

1. After-sales Services
2. Gifts
3. BOGOF
4. Price reductions
5. Competitions
6. Demonstrations
7. Free samples
8. Product placement [Sony products in Spider-man]

Marketing Budget

A marketing budget is a financial plan for the marketing of a product or product range for a specified period.

Why is a marketing budget important?

• A marketing budget specifies how much money is available for spending, therefore it makes the marketing department aware of how much they should spend and can accordingly choose what medium of promotion to use.
• A financial plan will encourage the marketing department to be cost-effective when carrying out the promotion of a product. This will create an incentive to operate most effectively so that the business does not run an unsuccessful marketing campaign.