The purpose of promotion is to reach the desired consumers and persuade them to act. A company may have a well-designed product offering, with a price and distribution system appropriate to its target market. But if it is unable to reach that market, then all its efforts will have been in vain. Promotion is responsible for awakening and stimulating consumer demand for the product. Promotion, in its broadest marketing sense, encompasses all selling activities—advertising, personal selling, sales promotion and public relations. The particular way an individual marketer combines these activities is called promotion mix.
To many customers, promotion and selling are synonymous with marketing. Promotion certainly represents a very large part of the marketing efforts of most firms, but it is, of course, only one part of marketing mix. Promotion is not limited to business activity, but is also used by a variety of non-profit organisations.
Of the four elements of marketing mix, promotion is the one used to the greatest degree by non-profit organisations. For instance, colleges use promotion to get students join, political candidates holding meetings (promotion) aim at winning votes, the government uses promotional technique for popularizing family planning programmes etc. Thus promotion is heavily relied upon by non-business organisations too.
Promotion activity ultimately comes under the direction of the marketing manager. In many large firms, however, each method of promotion mix operates independently. The marketing manager has the responsibility of coordinating and inter-relating all the methods to achieve the marketing objectives. Within the marketing frame-work, advertising, personal selling and sales promotion are termed as promotional mix.
There are two types of promotion blends:
1. Push Blend and
2. Pull Blend. They are closely related to the channel of distribution.
A push promotional blend emphasizes personal selling. The producer pushes the product to intermediaries, who organize promotion to reach consumers and sell the product. Firms develop strong sales forces at both the distributor and dealer level. Products are pushed through the channel of distribution and dealer.
On the other hand, a pull promotional blend emphasizes on impersonal selling. Here it is the producer who organizes advertising and sales-promotion campaign. Pull strategies have proved to be very effective for difficult distribution cases. A firm adopting this strategy would spend more on advertising and sales promotion.
The distinction between the two is shown below:
A PUSH STRATEGY call for using the sales force and trade promotion to push the product through the channels. The producer aggressively promotes the product to wholesalers; wholesalers aggressively promote the product to retailers and the retailers aggressively promote the product to consumers.
A PULL STRATEGY calls for spending a lot of money on advertising and consumer-promotion to build up consumer-demand. If the strategy is effective; consumers will ask their retailers for the product, the retailers will ask their wholesalers for the product and the wholesalers will ask the producers for the product.
Promotion may be informative, persuasive or reminiscent (reminder). Informative promotion is needed when a firm has distinctly new products for sale. For instance, when a firm that manufactures radio sets decides to produce television sets also, this fact must be known to the buyers i.e., informative promotion. Persuasive promotion is needed when a firm has a product, which is similar to other products.
Consumers are persuaded to purchase a particular product, which is better than others i.e., persuasive promotion. Reminiscent promotion is used after the products are well established in the market. Customers are frequently reminded of the product by the brand name, which is made a household name by repetitive advertisement.
Promotional Mixes and Strategies:
Marketing professionals use the term promotional mix to refer to the combination of personal selling, advertising, sales promotion and other forms of promotion. It becomes the promotional strategy. A combination of at least of two methods is essential for the promotion. Advertising is supported by personal selling or display. Personal selling will be expensive to make sales, when it is used alone. On the other hand a small expenditure on advertisement with personal selling will increase sales enormously.
For each component of promotional mix, management sets objectives, determines policies and formulates strategies. These promotional strategies are blended together to be known as “Promotional Blend.” This is blended with product-market, distribution and pricing strategies to become overall marketing strategies. There are many factors which influence promotional mix and they are known as product-market factors.
1. Nature of the Product:
Different products require different promotional mixes. Consumer goods and industrial goods require different strategies. Consumer goods are sold through advertising, personal selling and displays. Raw materials require personal selling.
(a) Product Complexity:
Products of a complex and technical nature require personal selling. Many industrial products—road graders, machine tools—require personal selling.
(b) Brand Differentiation:
Promotional mix is affected by brand differentiation and the degree to which the brand is differentiated from competitor’s brand.
(c) Purchase Frequency:
If buyers buy frequently a product as soap, paste etc., the marketer will invest a good amount on advertising to push on competition brands. On the other hand if the buyers buy rarely a product like household furniture, garden tool etc., personal selling will persuade the consumers to buy the product and to push it over the competitive brand.
2. Nature of the Market:
Different markets require different promotional mixes and strategies. In industrial market advertising plays a more informative role than the persuasive role for industrial buyers. Personal selling emphasises on these two roles i.e., information and persuasion in the industrial and consumers’ markets.
3. Stage in the Product Life Cycle:
The promotional product mix varies within stage in the product life cycle. The nature of demand varies according to the stages in the life cycle. During the introductory stage of a new product, the customers do not realize or understand the qualities of the product. Hence in the pioneering stage, sellers must stimulate the primary demand. Information about the product and its benefits are made known to the buyers.
In this stage more importance must be given to personal selling and trade shows. In the growth stage, customers know the qualities of the product. Hence to stimulate selective demand, advertising must be increased. In the maturity stage advertising is used as a tool of persuasion. In the decline stage, sales and profits decline and hence all the promotional activities should be cut down.
4. Market Penetration:
i.e., the product is already well known to the buyers. In that situation a sustaining promotional strategy is suitable. The retailers and middlemen try to stock the products. They try to become ‘best sellers.’ A brand has insignificant market penetration i.e., it has a small market or struggling market. In that condition, a developmental promotional strategy is suitable. Personal selling or push strategy or advertising or a full strategy is required.
5. Market Size and Location:
Product market size and location influence the promotional mix. In narrow markets where the number of potential buyers is small, direct mail is used. In a broad market, advertising is used. The location of market is in the urban and rural areas. In urban/markets where buyers are many, advertising can be used. In rural markets where buyers are few, personal selling can be used.
6. Characteristics of Buyers:
The characteristics of prospective buyers strongly influence the promotional mix. Experienced professional buyers such as industrial purchasing agents need personal selling. Inexperienced buyers like housewife, need advertising. Some buyers give importance to time, some to the purchase of products; some buyers act according to the influence of friends, relatives etc. Promotional mix and strategy are affected by these.
7. Distribution Strategy:
Companies fighting more through distribution for establishing their brand, invest more money on personal selling and advertising. Companies which have already established their brand in the market have to invest only a small amount in personal selling and advertising.
If the product is sold directly to the consumers, the method to be adopted is personal selling. If the product passes through a longer channel of distribution, the marketer gives more importance to advertising and less importance to personal selling. For consumer products, sold through channels, advertisement to final buyers is essential. Effective promotional packaging and display are also essential.
8. Pricing Strategy:
Pricing strategy influences the promotional mix strategy. If the brand is priced higher than the competition, more personal selling is needed to get a middleman to stock and push the brand. If the brand is priced lower, little promotion is needed. If the marketer allows middlemen mark ups on the brand to be lower than on competitive brands, heavy advertisement is needed ‘to force’ them to handle the company’s brand. There is considerable need for personal selling to retain its present customers and secure new customers.
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