Promotion Mix
Meaning of Promotion
Promotion informs, persuades, and reminds the audience about the product, its price, and where to buy it. This includes using different marketing tools and methods. Promotion is crucial for any business to attract customers and boost sales.
Importance of Promotion
The importance of Promotion element of marketing mix lies in its following functions:
- Information:
Tells customers about new products, services, or ideas and where to find them.
- Persuasion:
Encourages customers to choose a specific brand among many.
- Reminder:
Keeps customers aware of the brand and loyal, even during shortages. For example, Bourn Vita advertised during World War II despite being in short supply.
- Relationship:
Builds lasting relationships with customers through consistent promotion and engagement.
- Adds Value:
Influences customer perceptions to enhance value.
- Supports Other Efforts:
Helps achieve company goals, assists sales teams, and boosts other marketing activities.
Elements of Promotion Mix
Promotion can be of two types:
Above-the-Line (ATL): ATL communications use the broadcast medium and print media to reach the mass audience.
Below-the-Line (BTL): BTL activities are targeted to a selective audience which might be present in a store or in a fair.
Elements of Promotion:
- Advertising and Word-of –Mouth Communication
- Sales Promotion
- Direct marketing and online Marketing
- Personal Selling
- Public Relations and Sponsorship
- Advertising and Word-of –Mouth Communication
Advertising: According to The American Marketing Association,” Advertising is any paid, non-personal promotion of ideas, goods, or services by an identified sponsor, with elements like payment, non-personal nature, identifiable source, and promoted items.”
It misses aspects like persuasiveness and media usage.
Word of mouth is important, with influencers playing a significant role. Customer conversations and reviews greatly influence purchasing decisions. In India, 90% seek post-purchase confirmation, increasing product utility and excitement.
Despite online platforms' popularity, most word-of-mouth communication is still offline.
- Sales Promotion
According to The UK Institute of Sales Promotion, “Sales Promotion is any activity adding value to a product or service for a limited time by offering purchase incentives”. It is about providing extra benefits or value to prompt immediate purchases.
Sales promotion has become more popular than advertising due to its perceived value by consumers, effectiveness for dealers and distributors in boosting sales, and its ability to shift brand loyalty.
- Direct marketing and online Marketing
Direct marketing involves advertising activities that create direct relationships between marketers and individual customers and includes curriculum, dialogue, personal, relationship, or database marketing.
The aim is to build lasting relationships with targeted consumers, using tools like direct mail, phone, and internet to generate immediate responses, such as orders or requests for information.
Online Marketing or E-commerce covers various online business activities for exchanging products and services. Here parties interact electronically rather than physically.
- Personal selling
Personal selling is key part of the promotion mix, one of the 4Ps of marketing. It involves paid, two-way communication to persuade customers to buy products by providing information.
Direct selling, including telemarketing (selling over the phone), heavily relies on personal selling. This personalized approach helps build relationships and trust between the seller and the customer.
- Public Relations and Sponsorship
Public Relations (PR) is a management function that assesses public attitudes, sets organizational policies and interests, and executes actions to gain public understanding and acceptance. The purpose is to create mutual understanding between marketers and target groups, building a positive public image.
Sponsorship, involves supporting events, activities, or organizations financially or with products/services to achieve business goals. A sponsor provides this support, aiming for commercial benefits.
Modes of Advertising
Importance and Objections of Advertising
Role/ Importance/Objective of Sales Promotion
(Same points can be used to write the importance or objectives, for objectives, write ‘To’ to start sentence).
- Increased Trial:
Encourage existing customers to buy in bulk to boost sales volume.
- Increasing Loyalty:
Maintain customer loyalty even if the product is not the cheapest or the best.
- Widening Usage:
Inform users of additional uses for the product.
- Creating Interest:
Use inventive and stylish promotions, new product offers, celebrity endorsements, or engaging activities to attract attention.
- Creating Awareness:
Make people aware of the product through joint promotions with well-known products or services, alongside advertising.
- Deflecting Attention from Price:
Avoid price wars that can harm profitability.
- Gaining Intermediary Support:
Develop programs for wholesalers, retailers, agents, and distributors to encourage distribution, display, cooperative advertising, and customer introduction.
- Discriminating Among Users:
Offer early booking discounts and special benefits to motivate specific customer groups.
- Restoring Brand Perceptions:
Offer special promotions to customers who complain, to restore brand perception and loyalty after mishandling their accounts.
Types of Sales Promotion
Various Tools/Techniques/Tactics used for Sales Promotion are:
- Price Promotions:
a) Extra Fill Packs:
Offering extra product quantity for the same price.
E.g. Airtel Mobile Recharge Plans: Offers like "Talk Unlimited 3599" provide 2.5GB/day data and additional benefits like 1 year of Prime Video Mobile and Apollo 24|7 Circle for the same price.
b) Free Offers
Providing an additional unit of the product for free when purchasing a specified amount.
E.g. GrabOn Free Samples: Websites like GrabOn offer free samples of various products, such as body scrubs and hair oils, when you make a purchase above a certain amount.
c) Reduced Shelf Price
Offering a product at a lower price than its usual shelf price.
E.g. Big Bazaar Sales: Regular sales events where products are sold at significantly reduced prices compared to their original shelf prices.
d) Reduced Price Offers (RPOs)
Flashing an offer on the packaging, showing a saving or a slashed price.
E.g. Flipkart: Flash sales on Flipkart often offer substantial discounts on various products, such as "50% off on selected electronics."
e) Cash Rebates
Offering cash back to customers when they collect and send in tokens from product packs.
E.g. Amazon: Amazon often provides cashback offers on purchases, where customers can get a percentage of their purchase amount back as a cash voucher.
f) Cash Share-Out
Dividing a fixed sum of money among customers who return proof of purchase.
E.g. HDFC Bank: Offers where customers can earn cashback on certain transactions and share the rewards with friends or family.
g) Discounts
Offering a lower price than usual through discount coupons.
E.g. Coupon Websites: Websites like CouponDunia offer discount coupons for various products and services, such as "Get 20% off on your next purchase."
h) Repurchase Offers
Offering to buy back consumer durables at a specified price in the future.
E.g. Maruti Suzuki: Offers a buyback program where customers can trade in their old car for a new one at a discounted price.
i) Frequent-user Incentive
Providing benefits to frequent users, such as free miles for upgrades.
E.g. IndiGo Airlines: Frequent flyer programs where members can earn miles for free upgrades or other benefits.
j) Coupons
Distributing coupons that offer discounts on future purchases.
E.g. Grocery Stores: Supermarkets like Big Bazaar and DMart often distribute coupons that offer discounts on future purchases.
k) Sale
Marking items as "on sale" to attract more customers.
E.g. Shoppers Stop: Seasonal sales where items are marked as "on sale" to attract more customers, even if the price reduction is minimal.
l) Finance Deals
Offering low-interest or interest-free financing options.
E.g. Bajaj Finance: Offers low-interest financing options for purchasing consumer durables like refrigerators and washing machines.
Prize Promotions: Prize Promotions include free prize draws, sweepstakes, and competitions.
a) Free Prize Draws (and Lotteries)
Names of all entrants are put into a system, and winners are chosen randomly.
E.g. Big Bazaar's "Sabse Saste Din" offers where customers can enter a draw to win prizes during special sales events.
b) Sweepstakes/Games
A contest where prizes are distributed based on randomly selected winning tickets. Participants have no control over the outcome.
E.g. Pepsi's "Pepsi T20 Cricket Contest", where consumers could win prizes by entering a code found on Pepsi bottles.
c) Competitions
A contest where winners are determined based on skill.
E.g. Google India Code to Learn Contest, where students showcase their coding skills to win prizes.
- Premium Promotions
This is sales promotion strategy where the benefit is accompanied by an additional item of merchandise.
a) On-packet Offers:
Additional items are included directly with the main product packaging.
E.g. Buy a shampoo and get a small conditioner bottle attached to it.
b) With Purchase Premiums:
Customers receive a premium item when they make a purchase.
E.g. Buy two shirts, get a tie for free.
c) Free Mail-Ins:
Customers can mail in a proof of purchase to receive a free item.
E.g. Mail in receipts for five cereal boxes to get a free bowl.
d) Partner Promotions:
Promotional items are provided in collaboration with another company.
E.g. Buy a McDonald's meal and get a free toy from a popular movie.
e) Tailor-Made Offers:
Customized promotions based on customer preferences or purchase history.
E.g. Loyalty program members receive personalized offers or gifts based on their past purchases.
- Off-the-Shelf Offers:
a) Free Accommodation:
Particularly for the hotel industry, the offer now extends to “two nights for the price of one.”
b) Holiday Vouchers:
Some companies provide cash discounts, traveler cheques, duty-free shopping vouchers, etc.
c) Discount Coupons:
In India, firms like Snapdeal.com offer discount coupons that can be redeemed for health and beauty, entertainment, adventures, mobiles, apparel, lifestyle, electronics, and travel categories.
d) Two-for-One Flights:
Budget airlines often provide this facility.
e) Insurance Offers:
Car manufacturers often provide free insurance for the first year as part of sales promotions during slack seasons.
- Hybrid Sales Promotion:
Many companies from different countries try to improve their image through trade fairs.
Differences Between Advertising and Sales Promotion
- Origin:
Advertising comes from the Latin word "advertere" (to turn towards).
Promotion comes from "pomovere" (to move forward).
- Purpose:
Advertising aims to build a positive brand attitude long-term.
Promotion aims for short-term sales boosts.
- Method:
Advertising provides information or creates feelings to influence potential action.
Promotion directly motivates with immediate incentives.
- Duration:
Advertising focuses on long-term goals.
Promotion targets short-term results.
- Cost:
Advertising is generally more expensive.
Sales promotion is cheaper.
- Target Audience:
Advertising is suitable for medium to large firms.
Sales promotion is suitable for large firms.
- Objectives:
Advertising aims to increase sales and build brands.
Sales promotion provides additional knowledge and has a direct impact on sales.
- Effect:
Advertising indirectly assumes increased sales.
Sales promotion directly affects sales.
- Medium:
Advertising uses newsprint, TV, radio, and outdoor publicity.
Sales promotion uses discount coupons, free samples, tastings, contests, events, etc.
- Speed of Results:
Advertising results are slower.
Sales promotion results are faster.
- Examples:
Advertising: A TV ad listing features of Intex cell phones.
Sales Promotion: HUL giving free tubes of Close-Up toothpaste.
Differences Between Personal Selling and Sales Promotion
- Objective:
Personal Selling: Aims to create awareness and build long-term relationships, leading to closing sales.
Sales Promotion: Focuses on increasing sales and clearing stocks quickly.
- Interaction:
Personal Selling: Involves face-to-face interactions to provide product information and foster long-term relationships.
Sales Promotion: Does not involve direct interaction but uses incentives to encourage purchases and share information.
- Incentives:
Personal Selling: May include negotiations but incentives are not mandatory.
Sales Promotion: Always includes incentives to attract customers.
- Product Type:
Personal Selling: Suitable for high-value, complex, or custom-made products.
Sales Promotion: Ideal for low-value, easy-to-understand products.
- Market:
Personal Selling: Used in markets with fewer potential customers or those with high purchasing power.
Sales Promotion: Effective in markets with many customers and lower-value products.
- Cost:
Personal Selling: More expensive due to sales force training, dedicated personnel, repeated visits, and transportation.
Sales Promotion: Generally, less expensive compared to personal selling.
Promotion Mix
Factors Affecting the Selection of Promotion Mix
- Push and Pull Strategies:
The goal of promotion is to motivate and persuade not only consumers but also intermediaries who make goods available to consumers.
A push strategy focuses on persuading intermediaries to promote products, emphasizing personal selling along with advertising and trade promotions. Manufacturers promote goods to wholesalers, who then promote them to retailers, and retailers to consumers.
A pull strategy emphasizes consumer demand. If consumers demand particular goods from retailers, retailers will request those goods from wholesalers, who will then ask manufacturers. This strategy works well during recessions.
Marketing managers must decide whether to use a push or pull strategy, or a combination of both.
- Product Features:
The use of a specific promotion mix tool depends on the type of product.
Industrial products require more personal selling, while consumer products like HUL's Axe need more advertising.
Image-oriented products, like fashion garments, may need the presence of designers or celebrities in-store. Products with minimal feature differences benefit from more sales promotions.
Seasonal products need off-season sales, but year-round advertising is also necessary. High-priced products require personal selling to mitigate risks, while low-convenience goods rely more on advertising. Products like Viagra, condoms, and hair color for senior citizens need more advertising due to customer sensitivity.
- Stage of the Product Life Cycle:
Different promotion mix tools are effective at different product life cycle stages.
During the introductory stage, heavy advertising and free samples help create awareness.
In the growth stage, advertising increases while sales promotions decrease as consumers become aware of the product's benefits.
During the maturity stage, sales promotions are crucial to switch customers from competitors.
In the decline stage, the focus is on maximizing revenue, with reduced promotional expenditures.
- Buyer Readiness:
When customers are unaware of a product, advertising and public relations are more important.
As they approach the decision-making stage, sales promotion and personal selling become crucial.
- Type of Buyer:
Organizational or business buyers are influenced by specialized ads and personal selling, while consumers respond to glossy advertisements and celebrity endorsements.
- Type of Distribution:
Intensive distribution requires heavy advertising and sales promotion.
Selective distribution may have a varied promotion mix, while exclusive distribution of high-end products like Rado watches needs more personal selling.
- Promotion Objectives, Budget, Cost, and Availability of Media:
Promotional objectives align with overall marketing goals. Mass awareness campaigns use advertising, sales promotion, and public relations. To invite customers to stores for demonstrations, a combination of small-scale advertising, sales promotion, and personal selling is effective.
The promotion mix is also influenced by the budget. Small budgets focus on personal selling, while larger budgets use regional and national media.
The cost of promotional tools and media availability also play roles. For example, tobacco and alcohol advertising is banned on TV in India, and some ads are not permitted if they disrespect cultural values.
- Digital Dimension:
The rapid access to information through digital media requires marketers to understand and leverage digital platforms effectively.
- Elections:
Companies often use election time to promote low-priced products. However, some avoid increased distribution due to potential mismanagement and political ad competition.
Companies like Tata Global and Hero MotoCorp plan to push low-priced products during elections, while others like Parle and Dabur do not increase distribution efforts.