communication that facilitates exchanges by influencing the audience to
accept a product
The basic objectives of promotion are to:
If you opened a new restaurant, how much business could you expect
in the first week without promotion?
If passers-by did not know what was your menu or what were your prices,
why would they try your new business?
If you merely put a sign outside advertising your menu and prices, people might
then feel more comfortable with visiting you.
However, if you offered a special deal, such as buy one meal and
get one free, you might attract even more people by motivating
them to try your business.
Although you could not afford to give away too many meals, offering such an
incentive at the start might be a good way to attract people who would otherwise
not try your restaurant.
In giving away a free meal, the hope is that once you persuade someone to try
your product, they will like it and will return many more times in the future.
Many times, promotion neither informs prospective customers of anything they
don't already know nor provides any persuasion (attitude change).
Prospective customers who see an ad along the highway that says,
"Eat at Joe's" might already know what is on your menu and might
already know that they like what you have to offer.
Nonetheless, such a sign reminds people periodically about your business,
and maintains it in "top of mind awareness."
the combination of one or more promotional alternatives:
- personal selling
- sales promotion
- publicity (and public relations
any paid form of nonpersonal communication about an
organization, good, service, person, or idea by an identified
two way flow of communication between a buyer and seller for
the purpose of making sales and building customer relationships
short term incentives to encourage purchase or sales of a product
nonpersonal, indirectly paid presentation about an
organization, good, service, person, or idea
PUSH vs. PULL PROMOTIONAL STRATEGIES
Channel Push Strategy
promoting a product only to the next intermediary down the marketing
Channel Pull Strategy
promoting a product directly to final consumers to build strong
consumer demand that pulls products through the marketing channel
- all you can afford
allocate remaining funds after other needs have been met
- If I open a new pizza shop, I know that I have to promote heavily at
start-up. Whatever profit I make, I probably should invest this
back into promotion for the first few months of operation.
a percentage is added or subtracted from the prior periodís budget
- If an ongoing advertising strategy has been working over the years,
I might simply add to the budget every year to account for inflation.
- competitive parity
budget is set according to competitor actions or industry standards
- If I ask a bank for a loan to start a pizza shop, the banker won't
feel comfortable with an "all you can afford" budget in a
To realistically estimate ongoing promotion costs after initial start
up, I could estimate the promotional expenses of competitors by
researching their ads in the Yellow Pages,
in the newspaper, on the radio, and such.
If they are running successful businesses, then I should probably
expect to spend the same on my promotion activities and should report
this in my marketing plan (citing competitors as the justification).
- percentage of sales
budget is tied to revenues (e.g., commission payments)
- If my products are promoted by salespeople who are paid commission,
then expenses are a function of sales; a budget is set from a sales
- objective and task
budget is based on the cost of activities required to meet some
- If I know the typical performance of an average salesperson, then
I know how many more salespeople need to be hired in order to achieve
any particular level of increase in sales.
If I know the typical response to couponing, then I know how many
coupons to distribute and how many will be used in order to achieve
some particular level of increase in sales.
- full disclosure
requirement that promotion provides information necessary for a
prospective buyer to make an informed and safe decision
requirement that advertisers must provide evidence for the truth of
- deceptive advertising
promotion which has the capacity to deceive a measurable proportion
of the public
- cease and desist order
ruling that an advertiser must stop a promotion that is deemed to
- corrective advertising
ruling that an advertiser must conduct an advertising campaign to correct
consumer impressions that were formed by previously misleading advertising
a monitary penalty for deceptive promotion
15 JUL 05