jueves, 4 de diciembre de 2008

Promotion

PROMOTION
It would be safe to say that most companies engage in
some form of promotional activity every day of the year.
Promotion is one of the four Ps of marketing—price,
product, place, and promotion. Promotion is generally
thought of as a sequence of activities designed to inform
and convince individuals to purchase a product, subscribe
to a belief, or support a cause. All of the various tools
available to marketing managers for promotional activities
constitute what is known as the promotional mix.
PROMOTIONAL MIX
Marketing managers use different components of the promotional
mix as tools for achieving company objectives—
advertising, personal selling, public relations, and sales
promotion. Each of these elements can be further divided
into additional subcomponents or strategies. The majority
of a company’s promotional resources are usually spent on
these four elements for a simple reason: Companies perceive
these methods as the most effective means to promote
their products. Other specialized promotional
techniques, however, are also used to enhance promotional
objectives.
Advertising. Advertising is often thought of as the paid,
nonpersonal communication used in the promotion of a
cause, idea, product, or service by an identified sponsor.
The various advertising delivery methods include banners
at sporting events, billboards, Internet Web sites, logos on
clothing, magazines, newspapers, radio spots, and television
commercials. Among the common forms of advertising
are advocacy, comparative, cooperative, informational,
institutional, persuasive, product, reminder, point-of-purchase,
and specialty.
Personal Selling. Personal selling is considered one of the
most effective promotional techniques because it facilitates
interaction between consumer and seller. With personal
selling, a salesperson can listen to and determine a
consumer’s needs by asking questions and receiving feedback
from the consumer. Furthermore, personal selling
activities can generate long-lasting friendships between
consumers and sellers that typically generate many repeat
purchases. Personal selling can also occur by means of
interactive computers, telephone conferences, and interactive
videoconferencing. A drawback of personal selling,
however, is its high cost. Examples of products promoted
through personal selling include automobiles, life insurance,
real estate, and many industrial products.
Public Relations. Public relations has been described as
building goodwill with a company’s various constituencies,
including consumers, employees, government officials,
stockholders, and suppliers. The overall goal of any
public relations effort is to project a positive company
image when dealing with such issues as community and
government relations, employment practices, and environmental
issues.
Consumers. Public relations efforts are extremely
important for maintaining a company’s consumer
base. Consumers must believe that they are buying
from a caring, honest, and trustworthy company.
Negative media stories about, for example,
exploiting workers or producing substandard
products can do enormous damage to a company
in the eyes of consumers. Erosion of a company’s

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Promotion
client base is likely to result in both lost sales and
lost market share.
Employees. The most valuable asset a company has is
its employees. Therefore, it is essential that
employees believe in their company. Public relations
communications are extremely important in
ensuring that employees receive information
about the company before outside media receive
and report the information. A good example of
providing superior public relations would be to
inform company employees that a small reduction
in the work force is required but that a full
severance package will be provided for laid-off
employees. Although this news is not positive,
the employees are hearing about it first from the
company and are also aware that they will be
receiving assistance from the company. If
employees read or see negative reports about the
employer without a credible public relations
explanations, they may find other work or reduce
their productivity because of low morale.
Government officials. Maintaining a positive public
image is also important because government
agencies and offices (e.g., Federal Trade Commission,
Federal Communication Commission)
monitor the media and have regulatory oversight
over company activities. Positive stories in the
media obviously help promote a positive image
to government regulators, which reduces the
chance of being investigated and possibly fined.
The opposite is also true as stories about client
complaints or other dishonest practices or potentially
illegal actions will draw the government’s
attention and probably some sort of investigation—
something that no company wants. An
investigation can drag on for months, even years,
providing even more negative publicity. Even if
the government regulators find no wrongdoing,
the public is still likely to be skeptical because the
company was investigated. Therefore, every company
must make its best effort to answer any
questions that regulators have regarding negative
Sporting events, such as the FoodCity 500 NASCAR race seen here, are popular venues for advertising. © SAM SHARPE/THE SHARPE
IMAGE/CORBIS

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media stories or consumer complaints. A strong,
well-organized public relations department will
ward off potential trouble by being honest,
friendly, positive, and helpful to government regulators
and members of the news media.
Stockholders. Another key interest group for any
company that offers publicly traded securities are
the stockholders. If company stockholders generally
receive positive news about a company, they
are more likely to maintain investment, which
helps keep the stock price up. Negative news that
is not countered with positive public relations
can create uncertainty about how the company is
running and encourage stockholders to sell and
to invest in other companies. This action can
cause the stock value to decrease, making it difficult
to attract new investors.
Suppliers. Positive public relations are essential for a
company’s relation with its suppliers. Suppliers
are most concerned about being paid for the
product they are selling to a company. Since
most suppliers are generally not paid until ten to
twenty days after delivery of their product, they
must have faith in the ability of a company to
pay its bills. Any negative news regarding a company’s
financial position in the absence of a full
and complete explanation from the public relations
department may result in a damaged reputation
with suppliers. Suppliers could stop
shipping their products or demand that payment
is made at the time of delivery. Neither option is
appealing to a company, and both could cause
critical delays in getting its products to market.
Sales Promotion. Sales promotions are marketing practices
designed to facilitate the purchase of a product that
do not include advertising, personal selling, or public relations.
Companies use sales promotion for a variety of reasons,
including (1) to attract new product users who will
hopefully turn into loyal consumers who keep buying the
product; (2) to reward existing consumers with a price
reduction, thereby maintaining their loyalty; and (3) to
encourage repeat sales from occasional consumers.
SPECIAL PROMOTIONAL
ACTIVITIES
Companies use a variety of sales promotion tactics to
increase sales, including advertising specialties, cash
refund offers/rebates, contests and sweepstakes, coupons,
patronage rewards, point-of-purchase displays, premiums,
price packs/cents-off deals, samples, and trade shows.
Advertising specialties. Companies frequently create
and give away everyday items with their names
and logos printed on the items such as bottle/can
openers, caps, coffee mugs, key rings, and pencils.
Companies prefer to use inexpensive handouts
that will yield constant free advertising when
used by the recipient.
Cash refund offers/rebates. A cash refund or rebate is
similar to a coupon except that the price reduction
comes after the product is already purchased.
In order to receive the cash refund/rebate,
the consumer must send in a proof of purchase
with the company offer in order to obtain the
refund. Rebates are often an excellent form of
sales promotion for a company to use because a
high percentage of consumers will not send in
the forms for the refund.
Contests and sweepstakes. Many companies use contests
and sweepstakes to increase the sales of a
product. As a reward for participating, consumers
might win cash, free products, or vacations. With
a contest, participants are required to demonstrate
a skill; for example, entrants might be
asked to suggest a name for a new product,
design a company logo, or even suggest a company
name change. Contest entries are then
reviewed by a panel of judges; the originator of
the winning entry receives a prize, usually in the
form of cash or a vacation. In contrast to the skill
required with contests, a sweepstakes winner is
determined by chance. For example, consumers
maybe given a scratch card in a fast-food restaurants;
if three-of-a-kind or another predetermined
criterion is achieved, the consumer would
be given a free hamburger or some other selected
prize.
Coupons. Coupons are certificates that give consumers
a price savings when they purchase a
specified product. Coupons are frequently
mailed, placed in newspapers, or dispensed at the
point of purchase. In addition, some companies
have coupons generated when an item is scanned
at the register. Companies can promote both new
and mature products through the use of coupons.
Patronage rewards. Awards provided by companies to
promote and encourage the purchasing of their
products are called patronage rewards. Airlines
use this strategy by awarding frequent-flyer miles
to consumers who use their services often. When
a consumer has earned enough frequent-flyer
miles, he or she can redeem a free ticket. Credit
card companies also use patronage rewards by

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providing a list of free products a person can
order based on the number dollars charged in a
specified time period.
Point-of-purchase displays. Point-of-purchase promotions
can include displays and demonstrations
that take place at the point of purchase. The
cardboard cutouts of popular movie stars that are
put next to merchandise are excellent examples of
this method. One drawback to point-of-purchase
displays is that stores do not have time to set up
all the ones that are offered, so only a handful of
them are used. Companies frequently offer assistance
in assembling and removing promotional
displays to encourages storeowners to use their
point-of-purchase displays.
Premiums. A premium is a good offered free or at a
low cost to encourage consumers to buy a particular
product. Companies can also offer premiums
in the form of reusable containers bearing names
and logos in order to help promote other products.
In addition, a company may also decide to
use a self-liquidating premium. The costs associated
with self-liquidating premiums are passed
along to consumers through the cost of product.
Price packs/cents-off deals. Price packs provide consumers
with a reduced price that is marked
directly on the package by the manufacture.
Companies can offer price packs in the format of
two for the price of one or offer products such as
a tube of toothpaste and a toothbrush in one
package for a lower price than that of the two
items purchased separately. Consumers generally
react favorably to price packs because they are
perceived as a real bargain.
Samples. Some companies offer free samples of their
products. The rationale for offering a free product
sample is to achieve immediate consumer
introduction to the product. Companies have
several ways to introduce potential consumers to
product samples. Commonly used delivery methods
include mailing the product, passing the
product out in stores, or door-to-door delivery of
the product. The largest drawback of free samples
is their high cost. However, it is expected that the
associated sales will offset the initial cost of the
free samples.
Trade shows. Most industries hold conventions and
trade shows each year to show off new technology,
assess consumer trends, and review other
issues important to the industry. Trade shows
provide firms that sell to a particular industry an
excellent opportunity to promote new products,
make new contacts, renew existing business relationships,
maintain or build a reputation, and
distribute promotional materials.
PROMOTIONAL OBJECTIVES
There are a number of promotional objectives, some of
the most common being information dissemination,
product demand, product differentiation, product highlights,
and sales stabilization. Regardless of the promotional
objective selected, the company’s goal is to inform
and convince consumers to buy the product.
Information Dissemination. One of the most basic
desires of a company is to provide information about a
product to potential consumers. Tools available to an
organization for informing potential consumers about a
product include billboards, flyers, Internet Web sites,
magazines, newspapers, radio spots, and television commercials.
Normally a variety of these promotional tools
are used to communicate a single, coordinated message to
potential consumers. These different promotional tools
can provide potential consumers with an array of information
about a product, such as features, quality, and/or
price. The informational focus depends on the makeup of
the target audience that the company is trying to reach
with its message.
Product Demand. Another organizational goal of promotional
activities is to create product demand. A company
has several promotional options for fostering product
demand. For example, a company may focus on using a
primary demand strategy that concentrates on trying to
increase demand for a general product or service line.
Large companies or cooperatives that have well-known
and large product lines normally use the primary demand
strategy. Advertisements for these companies carry over to
all product categories and, as a result, may improve sales
in several product areas. Companies also use another marketing
strategy, known as selective demand, which concentrates
on promoting a specific brand within a
company’s product line. Selective demand is often used to
help promote a new product so that consumers are aware
of the new addition to a large company’s product line. A
company may also utilize a selective demand strategy
when it wants to sell a product that has a high profit margin.
A good example of this strategy is the active promotion
of sport utility vehicles by major automobile
companies.
Product Differentiation. A common challenge faced by
companies is increased competition, which often results in
the market being flooded with similar products. Consumers
may conclude that no substantial difference exists

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between the products (homogeneous demand) and, therefore,
look for the lowest-priced product to purchase. An
industry that has experienced the problem of homogeneous
demand is the soft-drink industry. With few exceptions,
most consumers do not make a distinction among
the numerous beverages that are offered. A company that
excels at product differentiation can normally demand a
higher price for a product because of its perceived higher
quality.
Product Highlights. Companies have another tool to
employ in order to justify a higher-priced product: A firm
can accentuate the product’s exceptional quality in detail
to convince consumers that the extra cost is worthwhile.
Highlighting a product’s quality might sound easy, but a
company must first develop superior advertisements to
promote the product. Moreover, the firm must develop a
reputation for making a superior product that is well
known to the average consumer. Volvo is one company
that has done an excellent job of creating the image of
producing only high-quality, safe cars. Thus. Volvo can
charge an extra premium for its cars. Caterpillar has also
nurtured and promoted a reputation for producing only
the best heavy earth-moving equipment in the world. It,
too, charges an increased price for its products.
Sales Stabilization. A challenge that companies face is
inconsistent demand for their products throughout the
year. Reasons for this fluctuation can range from seasonal
demand to changing economic conditions. Most companies
would rather have a consistent demand for their
products throughout the year, since this would allow them
to have steady production and distribution facility operations.
Ice cream manufacturers often face this dilemma
because in the summer months demand for ice cream normally
reaches its highest levels while sales decrease substantially
in the winter. In order to combat these shifts in
product demand, ice cream companies might offer
coupons to encourage the purchase of their products during
slow sales seasons.
SUMMARY
Companies engage in promotional activities virtually
every day of the year. The various tools available to marketing
managers for such activities are known as the promotional
mix. Elements of the promotional mix include
advertising, personal selling, public relations, and sales
promotion. Each of these promotional mix elements can
be further divided into sub-elements depending upon company objectives.

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