Types of Promotion – Promotion Mix

Types of Promotion – Promotion Mix

Marketers have at their disposal four major methods of promotion. Taken together these comprise the promotion mix. In this section a basic definition of each method is offered while in the next section a comparison of each method based on the characteristics of promotion is presented.

• Advertising – Involves non-personal, mostly paid promotions often using mass media outlets to deliver the marketer’s message. While historically advertising has involved one-way communication with little feedback opportunity for the customer experiencing the advertisement, the advent of computer technology and, in particular, the Internet has increased the options that allow customers to provide quick feedback.
• Sales Promotion – Involves the use of special short-term techniques, often in the form of incentives, to encourage customers to respond or undertake some activity. For instance, the use of retail coupons with expiration dates requires customers to act while the incentive is still valid.
• Public Relations – Also referred to as publicity, this type of promotion uses third-party sources, and particularly the news media, to offer a favorable mention of the marketer’s company or product without direct payment to the publisher of the information.
• Personal Selling – As the name implies, this form of promotion involves personal contact between company representatives and those who have a role in purchase decisions (e.g., make the decision, such as consumers, or have an influence on a decision, such as members of a company buying center). Often this occurs face-to-face or via telephone, though newer technologies allow this to occur online via video conferencing or text chat.

Each of these methods will be covered in much greater detail in later tutorials.

Promotion Summary Table

The table below compares each of the promotion mix options on the eight key promotional characteristics. The summary should be viewed only as a general guide since promotion techniques are continually evolving and how each technique is compared on a characteristic is subject to change.

Characteristics	Advertising	Sales Promotion	Public Relations	Personal Selling
Directed Coverage	mass & targeted	mass & targeted	mass	targeted
Message Flow	one & two-way	one & two-way	one-way	two-way
Payment Model	paid limited non-paid	paid	non-paid	paid
Interaction Type	non-personal	personal & non-personal	non-personal	personal
Demand Stimulation	lagging	quick	lagging	quick
Message Control	good	good	poor	very good
Message Credibility	low-medium	low-medium	high	medium-high
Cost of Promotion	CPI - Low CPTI - Varies CPA - Varies	CPI - Medium CPTI - Varies CPA - Varies	CPI - None CPTI - None CPA - None	CPI - High CPTI - High CPA - High

Factors Affecting Promotions Choice

With four promotional methods to choose from how does the marketer determine which ones to use? The selection can be complicated by company and marketing decision issues.

Company Issues:

• Promotional Objective – As we discussed, there are several different objectives a marketer may pursue with their promotional strategy. Each type of promotion offers different advantages in terms of helping the marketer reach their objectives. For instance, if the objective of a software manufacturer is to get customers to try a product, the use of sales promotion, such as offering the software in a free downloadable form, may yield better results than promoting through Internet advertising.

• Availability of Resources – The amount of money and other resources that can be directed to promotion affects the marketer’s choice of promotional methods. Marketers with large promotional budgets may be able to spread spending among all promotion options while marketers with limited funds must be more selective on the promotion techniques they use.
• Company Philosophy – Some companies follow a philosophy that dictates where most promotional spending occurs. For instance, some companies follow the approach that all promotion should be done through salespeople while other companies prefer to focus attention on product development and hope word-of-mouth communication by satisfied customers helps to create interest in their product.

Marketing Decision Issues:

• Target Market – As one might expect, customer characteristics dictate how promotion is determined. Characteristics such as size, location and type of target markets affect how the marketer communicates with customers. For instance, for a small marketer serving business markets with customers widely dispersed, it may be very expensive to utilize a sales force versus using advertising.
• Product – Different products require different promotional approaches. For the consumer market, products falling into the convenience and shopping goods categories are likely to use mass market promotional approaches while higher-end specialty goods are likely to use personalized selling. Thus, products that are complex and take customers extended time to make a purchase decision may require personal selling rather than advertising. This is often the case with products targeted to the business market. Additionally, as we briefly discussed in the Managing Products Tutorial and will later see in the Planning and Strategy Tutorial, products pass through different stages in the Product Life Cycle. As a product moves through these stages the product itself may evolve and also promotional objectives will change. This leads to different promotional mix decisions from one stage to the next.
• Distribution –Marketing organizations selling through channel partners can reach the final customer either directly using a pull promotion strategy or indirectly using a push promotional strategy. The pull strategy is so named since it creates demand for a product by promoting directly to the final customer in the hopes that their interest in the product will help “pull” more product through the distribution channel. This approach can be used when channel partners are hesitant about stocking a product unless they are assured of sufficient customer interest. The push strategy uses promotion to encourage channel partners to stock and promote the product to their customers. The idea is that by offering incentives to channel members the marketer is encouraging their partners (e.g., wholesalers, retailers) to “push” the product down the channel and into customer’s hands. Most large consumer products companies will use both approaches while smaller firm may find one approach works better.
• Price – The higher the price of a product the more likely a marketer will need to engage in personalized promotion compared to lower priced products that can be marketed using mass promotion.