MBA 604 Four P's: Promotion

| Product | | Price | | Promotion | | Place |

| Advertising | | Sales Promotion | | Personal Selling | | Public Relations | | Communication Process |

| Setting the Promotion Mix | | Current Trends | | Talk Topic | | Bottom of Page |

Promotion Mix
Just as we have a "Marketing Mix" (the 4 P's), we also have a "Promotion Mix," consisting of the following:

Advertising

Advertising is "any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor." Specific media tools include print (magazines, newspapers, direct mail), broadcast (television, radio), and display (billboards, signs, posters).
With the exception of advertising for specific events (e.g. "Presidents' Day" sales), most advertising campaigns have a relatively long time frame. They are often intended to convey a consistent, enduring image that continually reinforces the positioning of the product or company (e.g. "The Pepsi Generation").

With the growth of the Internet, the line between "advertising" and just plain "information" is becoming even more blurry. Does the above definition still hold in today's environment? (See the "TALK" topic below)

Sales Promotion

Sales promotion is the use of "short-term incentives to encourage the purchase or sale of a product or service." The key term is "short-term," as most sales promotions have a finite time frame when the terms of the offer are in force. Sales promotions aimed at the consumer are often communicated at the point-of-sale (e.g. via in-store displays or on-package mentions), conveying a "Buy me NOW!" message. Other sales promotion tools include premiums, discounts, coupons, cash rebates, "free" goods, specialty advertising, and demonstrations.
Although this is also a non-personal form of communication, many sales promotion themes are intended to spark personal interest in the product or service being promoted.

Sales promotions are not directed solely toward the end user. Often, there is an underlying promotion directed toward company employees and trade factors (distribution channel members), using the same promotion theme. For example, a sales promotion offering consumers a trip to London may offer the same trip to the top-performing salesperson in the company, or the retail outlet selling the most merchandise during the promotion's duration.

Personal Selling

"Two-way communication for the purpose of making sales and building customer relationships." Obviously, this form of communication is "personal." It provides a forum for immediate exchange of needs, goals, ideas, and feedback.
A good salesperson listens to the customer and reacts to the information being conveyed. Product-related information can be tailored to the individual (or group), and presented in a way that is meaningful and pertinent to the situation.

Personal selling tools include sales presentations, trade shows, and incentive programs.

Public Relations

When the U.S. space program was just getting underway, NASA made great use of PR to gain public support. The result: American taxpayers concentrated on the "Race to the Moon" instead of the high cost of the program.
Public relations is intended to build good relations with the company's various publics by obtaining favorable publicity, building up a good "corporate image," and handling or heading off unfavorable rumors, stories, and events.
Public relations offers several unique qualities. It is very believable -- news stories, features, and events seem more real to readers than ads do. Public relations can also reach many prospects who avoid salespeople and advertisements; the message gets to the buyer as "news" rather than as a sales-directed communication. Like advertising, public relations can dramatize a company or product.

The "news" quality of public relations has also served to blur the distinction between "advertising" and information posted on the Internet. Although some initial postings resulted in the company in question being "spammed," a great many initial "information- only" postings about products on the Internet were nothing more than public relations pieces. Once the door was open, it wasn't long before unabashed advertising took hold.

Factors in Setting the Promotion Mix

Type of Product/Market: The importance of different promotion tools varies between consumer and business markets. Consumer goods companies usually put more of their money in advertising, followed by sales promotion, personal selling, and public relations. In contrast, industrial goods companies put most of their funds in personal selling, followed by sales promotion, advertising, and public relations.

Push vs. Pull Strategy:The promotion mix is affected heavily by whether the company uses a push or pull strategy.

Buyer Readiness Stage: The effects of promotional tools vary for the different buyer readiness stages (awareness, knowledge, liking, preference, conviction, purchase). Advertising and public relations play the major role during the awareness and knowledge stages. Liking, preference, and conviction are more affected by personal selling. Closing the sale is mostly done with sales calls and sales promotion.

Product Life Cycle Stage: In the introduction stage, advertising and public relations are good for producing high awareness, and sales promotion is useful in promoting trial purchase. Personal selling must be used to get the trade to carry the product. During growth, advertising and PR are still very influential, whereas sales promotion can be reduced because fewer incentives are necessary. In maturity, sales promotion becomes important again -- buyers know the brands, and promotion can aid or prevent brand switching. In decline, advertising is used to remind end users of the product, PR is dropped, and salespeople give the product only a little attention. Sales promotion, however, might be strong, as the company seeks to squeeze every last ounce of potential from the product.

Push strategy: sales force and trade promotion "push" the product through the channel of distribution -- the producer promotes the product to wholesalers, wholesalers to retailers, and retailers to the end user.

Pull Strategy: calls for spending a lot on advertising and promotion to build up consumer demand. If the strategy is successful, consumers will ask retailers for the product, retailers will ask wholesalers, and wholesalers will ask producers -- "pulling" the product through the distribution channel.

The Product Life Cycle (PLC) shows a product's sales and profits over its lifetime. It involves five distinct stages:

1. Product development
2. Market Introduction
3. Market Growth
4. Market Maturity
5. Sales Decline

Promotion = Communication

It is important to note that communication goes beyond the specific promotion mix elements outlined above. The product's design, price, shape, color, package design and graphics, the stores that sell it, etc. all communicate something to the buyer. Thus, although the promotion mix is the company's primary communication activity, the entire marketing mix -- promotion and product, price, and place -- must be coordinated for the greatest communication impact.

Marketers need to understand how communication works. The process involves the nine elements listed to the right. Two of these are the major parties in a communication -- the sender and the receiver. Another two are the major communication tools -- the message and the media. Four more are major communication functions -- encoding, decoding, response, and feedback. The last element is noise in the system.

Elements of the Communication Process:

Sender: The party sending the message to another party. In our context, the manufacturer or principal.

Encoding: The process of putting the message into symbolic form -- words, illustrations, and images.

Message: The set of symbols that the sender transmits, e.g. the actual advertisement.

Media: The communication channels through which the message moves from sender to receiver, e.g. TV, newspapers, magazines, billboards, the Internet, etc.

Decoding: The process by which the receiver assigns meaning to the symbols encoded by the sender. Hopefully, the decoded message is the same as the encoded message.

Receiver: The party receiving the message -- hopefully, the target market.

Response: Reactions of the receiver after being exposed to the message -- any of hundreds of possible responses. As marketers, our desired response is that the receiver buys our product (although NOT buying is also a response).

Feedback: The part of the receiver's response that is communicated back to the company. Consumers may write or call the company to praise or criticize the message or the product itself.

Noise: The unplanned static or distortion during the communication process. Results in the receiver getting a different message than the one sent. Noise may be a result of poor TV reception, being distracted by someone, or even the presence of other companies' messages.

The model points out several key factors in good communication. Senders need to know what audiences they wish to reach and what responses they want. They must be good at encoding messages, taking into account how the target audience decodes them. They must send messages through media that reach target audiences, and they must develop feedback channels so they can assess the audience's response to the message.

Current Trends in Communication

Recent shifts from mass marketing to one-on-one marketing, coupled with advances in computers and information technology, have had a dramatic impact on the marketing communications environment. Although still important, the mass media are giving way to a profusion of smaller, more focused media. Companies are doing less "broadcasting" and more "narrowcasting."

This shift is most evident in the rapid growth of direct marketing, which employs one-on-one communications channels to obtain an immediate buying response. Major forms of direct marketing include: (1) direct mail and catalog marketing; (2) telemarketing (phone); (3) television marketing (infomercials and shopping networks); and (4) on-line shopping. Successful direct marketing begins with a good database, which can be used to locate potential customers, tailor goods and services, and target marketing communications.

As marketing communicators adopt richer, but more fragmented, media mixes to reach their target markets, they run the danger of creating a communications "hodge-podge" for consumers. To prevent this, more companies are adopting the concept of integrated marketing communications, which calls for inter-twining all sources of company communication to deliver a clear and consistent message to target markets.

People at all levels of the organization must be aware of the many legal and ethical issues surrounding marketing communications. Much work is required to produce socially responsible communication in advertising, personal selling, and direct selling. Companies must work hard and proactively at communicating openly, honestly, and agreeably with their customers and resellers.

When the internet was in its infancy, advertising was considered to be a "No-no." If information on the Internet is "free," under the strictest interpretation of the definition for advertising above, one could argue that this form of communication is not "advertising." Yet, even the most casual observer would claim that websites are full of advertising. So, what happened?

last update: September 24, 1998
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