Promotional Activities in Marketing: Definition, Needs, Objectives and Other Details!
Todays market is full of offers and discounts. Marketers use multiple promotion programmes to entice customers to buy products and services. While objectives of advertising are long term and generally of brand building, sales promotion programmes often pursue a single goal, that is, to maximize sales in short run.
The consumer promotion programmes are visible to the audience because they are often advertised in the mass media. Companies also undertake trade intermediary promotion and sales force promotion programme to increase sales. This is important because in both direct and indirect marketing programmes, sales and trade play an important role in the product and information flow process.
Hence, without adequately promoting the product at trade and sale force end, many consumer promotion programmes will not achieve its desired objectives. Sales promotion programmes are short term programmes aimed at maximizing sales in a period of time but what is most important to remember is that the sales promotion programme should be designed in such a way that it does not affect the overall brand image of the firm and its product.
Many companies offer sales promotion programmes more frequently. Though they are able to optimize their sales in a short run period but frequent use of sales promotion leads to brand value erosion. Sales promotions are increasingly being used to accomplish an ever-expanding list of marketing objectives.
Companies pursue short term and long-term marketing goals. In the long run, they wish to build brands, which deliver value over long period of time. In the short-term, they pursue sales market share goals. The demand for products and services is affected by various extraneous factors like seasonality of business, entry of new competitor into the business. In off seasons, sales are not healthy and there is a fall in market demand which creates excess inventory in the pipeline and companies use sales promotion schemes to promote sales during off-season period.
The definition of promotion is the co-ordination of all seller-initiated efforts to set up channels of information and persuasion to facilitate the sale of goods, or service or the acceptance of an idea. The promotion refers to the activities to push forward or to advance an idea, in such a way as to gain its approval and acceptance. Promotion is telling and selling. Brink and Kelly have defined promotion as, the coordination of all seller initiated efforts to set up channel of information and persuasion to facilitate the sale or a product service or the acceptance of an idea.
Product planning, pricing and distribution are marketing activities that are performed mainly within the company or between the company and its marketing partners. Sales are the life-blood of the business. The ultimate aim of production is sale. Sales revenue is the important source of income. Sale is not self-generating activity.
The stiff competition has increased the importance of sales promotion efforts on the part of the producers. Thus, sales promotion means all the steps that are taken for the purpose of obtaining or increasing sales. In the words of Hopkins Sales promotion is an organised effort applied to selling job to secure the greatest effectiveness for advertising and for dealers help.
Sales promotion, as a tool of marketing promotion, gives rise to increase in product usage as well as expansion of a product or introduction of a new product. Promotion means any marketing effort whose function is to inform or persuade actual or potential consumers about the merits of a given product or service for the purpose of introducing a consumer either to continue or to start purchasing the firms product or service at same (given) price.
Promotion is the fourth major component of companys total marketing mix (along with product planning, pricing and distribution). Its intent is to inform, persuade and influence people. Promotional activity in marketing is basically an exercise in communication. It is a basic ingredient in non-price competition and it is an essential element in modem marketing.
It is an exercise in information, persuasion and influence. Communication is necessary in exchange activities. For instance, we have the best products with good package, fair price etc. The products cannot be sold to consumers unless buyers know it. People must know that the right products are available at the right place and at the right price.
This is the job of promotion in marketing. Promotion is a spark plug in marketing mix. It can be defined as the coordinated, self-initiated efforts to establish channels of information and persuasion to facilitate or foster the sale of goods or services, or the acceptance of ideas or point of view.
Thus, promotion refers to activities and processes designed to change or reinforce behaviour and/or ideas of the consumers, through communication, so that they are persuaded to buy what they might not otherwise buy, and what they dont really want to buy. Promotion is telling and selling. It is an exercise in information, persuasion and influence. These three are inter-related in the sense that to inform is to persuade; and if a person is persuaded he is informed.
In the present era, selling is a complicated task. There may be stiff competition. There may be many substitute products. Products have become more consumer-oriented. Consumers have become more sophisticated. For instance, they possess the best products at a fair price. The products are of a better quality than the substitute produce for sale. But sales are not automatic.
The prior idea of the production is for the sales. How will the buyers get the products, when they have not heard of our products? Therefore, people must have knowledge of the existence of the product and its availability. This is possible only through a good propaganda. There arises a need for proper flow of information along with products from producer to consumer. Thus promotion is the process of marketing communication aimed to inform, persuade and influence people. The statement Nothing happens until somebody sells something gives in a nutshell the place of promotional activities in todays business.
The promotional activities must aim:
(a) To inform prospective buyers about the existence of a product and its want-satisfying capabilities.
(b) To remind the users of past and present to its various roles on consumption.
(c) To persuade the prospective buyers in a most effective manner.
Selling, Promotion and Sales Promotion:
Selling and promotion are propagated synonymously. Selling is a narrow term and refers to the transfer of title from the seller to the buyer. It does not include advertising and other demand creating methods. But promotion is a broader term; it includes advertising, personal selling, sales promotion and other selling tools.
Promotion and sales promotion are different terms. Sale promotions are only a part of promotion. Promotion covers all other marketing activities more efficiently and effectively. Sales promotion helps the selling activity only. To attract customers, awaken their demand and stimulate them to act in the desired manner are the main purposes of promotion.
Sales promotion acts as a bridge between advertising and personal selling to coordinate efforts in these two areas. The main tasks of promotional activities are to establish and maintain communications with large market segments. Promotion is essential in modem marketing and is in the form of non-price competition.
Promotion is a very wide term including advertising, personal selling, sales promotion and other promotional tools that can be devised to reach the goals of the sales programme. On the other hand, sales promotion is only a part of it. Sales promotion has been defined as activities, other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness, such as displays, shows and expositions, demonstrations etc.
The Need for Promotional Activities:
Promotion is the final element in the marketing mix. The manufacturer has to take effective steps in meeting the consumer in the market after taking the decision relating to the nature of products, its price and its distribution. The present age is of consumer-oriented markets and therefore, it is the responsibility of manufacturer to know what is required by the buyers.
Even the most useful and want-satisfying product will be a marketing failure if no one knows it is available. Thus, it becomes essential, rather a duty, of the manufacturers to make the customers know from where, how, when and at what price the product would be available.
As the distance between producers and consumers increases and as the numbers of potential consumers grow, promotional activities are necessary. More and more promotional activities are required to induce the consumers to purchase more and more products and thus demand for the product is created. A basic purpose of promotion is to let potential customers know about the products.
Secondly, there is stiff competition among the manufacturers. Therefore, promotional activities are necessitated. When a producer increases his promotional activities, others also follow the same and this leads to promotion war.
Thirdly, large scale production can be achieved only with methods of large scale selling, which is possible only through the promotional activities.
Fourthly, when there is an imperfect market condition, product cannot easily be sold on the basis of product-differentiation. In such a situation, only the promotion activities draw the attention of consumers. The customers are attracted to buy the products on the basis of promotional activities.
Personal selling is a direct or personal method of selling the products. In other words, personal selling is direct selling. Face-to-face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions and procuring orders.
Direct marketing involves direct communication with selected target customers on a one-to-one basis to obtain an immediate response and cultivate lasting customer relationships. For example, using mail, fax, telephone, e-mail, the internet etc.
Any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. For examples, it includes, newspapers, magazines, outdoor posters, banners, direct mail, radio, TV, internet etc.
A variety of short-term incentives to encourage trial or purchase of a product or service. For examples, samples, exhibitions, demonstrations, coupons etc.
Publicity includes non-personal promotion of demand for products by obtaining publicity through news in media, TV, Radio magazines, etc.
Public relations include building good relations with the public by obtaining favourable publicity, building a good corporate image or avoiding unfavourable publicity.
The overall purpose of promotion is:
Communication is the basis of marketing, it is not enough merely to communicate, but communication should be convincing enough to supplement and provide adequate advantages as compared to competitors product. The favourable change in the pattern of consumer demand is secured through commercial information, persuasion and influence with the help of personal selling, advertising, publicity and sales promotion devices.
Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.
Oral presentation in a conversation with one or more prospective purchasers for the purpose of making sales.
Short-term incentives to encourage the purchase or sale of a product or service.
Building good relations with the companys various clients by obtaining favourable response building up a corporate image and handling or heading off unfavourable rumours, stories and events.
The important purpose of promotion is to change the location and shape of the demand curve. Creation of demand is one of the functions of selling. But promotion is responsible for the creation of demand. Promotion is an exercise in information, persuasion and influence, which are inter-related, in that to inform is to persuade and if a person is persuaded, he is probably also being informed. Promotional activities are essential for imperfect competition.
Due to the increase in the physical distance between producers and consumers, there is the increase in need for promotion. There is also the increase in the number of potential consumers, which increases the problem of market communication.
There are many middlemen-wholesalers and retailers-existing between the producer and the final consumer. The information must be passed on not only to the consumers, but also to the middlemen. In turn, the middlemen communicate to the consumers about the products. Thus promotion is the important process of marketing communication.
Today consumers give more importance to want-satisfaction rather than to their needs. They are selective in their choice of alternative expenditure. A firm must have the best promotional programme to attract such customers. During economic decline, selling is a problem. At that time, promotion is essential to maintain the standard of living and the high level of employment in the country.
Objectives of Promotional Activities:
Histy and Will have put in the following objectives of promotion:
The idea of promotion is to influence, stimulate, maintain and create demand for a product. Promotion is responsible for demand creation. To create demand for products, a number of promotional activities must be taken. These activities can be employed to maintain the demand and to capture demand from competitors. They are alternative instruments for meeting competition and for the creation and maintenance of consumer demand.
It aims at creating awareness. It provides information to consumers and retailers about product features, where the products can be obtained and what the products are capable of doing or achieving brand preferences.
(Performance Objectives). It gives specific information about a product, and influences the consumers decision of purchasing.
In marketing system, promotional activities are exercised through communication. If the executives know the benefits of communication, they can manage the promotional programme in a better way. The word Communication is derived from the Latin word Communis which means common. When, we communicate, we are trying to establish a commonness with someone.
The fundamental four elements of communication process are:
The sender sends the message and the receiver receives the message. True communication takes place only when the two parties mean the same thing or have in common the same message.
(The process of communication has two divisions, explicit and implicit. Explicit communication means the use of language that is verbal. Implicit communication is in the nature of non-verbal communication, i.e., understanding a message through symbols).
The three elements or stages of a communication process are a message, a source and a receiver. But to be more elaborate, the communication process is of five stages.
At the first stage the source originates the communication. The person is a sender of the message. For example, the marketing executive communicates the ideas or information to his subordinates.
The second stage is encodingthe idea to be communicated is converted into a message form i.e., the idea is translated in a language (explicit) or medium of expression (implicit) suitable for transmission.
In the third stage, the message carrying the idea flows or moves from the source towards the receiver by print media or sound wave.
In the fourth stage decoding takes place i.e., the message is interpreted.
In the fifth stage the receiver receives the decoded messages and acts as per the message received. It is the largest of the communication.
The other elements affecting communication process are noise and feedback. Noise consists of extraneous interferences with communication. It creates many obstacles in reducing effectiveness of the communication process. It can be actual noise, such as thundering or other kinds of interferences. Any sort of disturbance affecting the receivers attention while receiving the message is noise. Noise is present in some degree or another, in all communication processes.
Feedback is essential for effective communication. It determines the effectiveness of the communication. It reveals the acceptance or rejection of the receiver. Feedback takes many forms a nod, an expression of interest or a smile from the listener or reader. Feedback is the reverse flow of communication from the consumer to the marketer.
Promotional Campaign and Promotional Decision:
A campaign is a co-ordinated series of promotional efforts built around a single idea designed to reach a predetermined goal. Campaign is an appropriate activity to apply to the entire promotional programme. Promotional decisions are guided by previous results. They are concerned not only with the target of market channel of distribution to be used, but also with price and product.
The steps of promotional decisions are:
4. Appealing to its nature and timing
Relative Costs of Different Forms of Promotion:
The methods of promotion vary considerably according to the cost for messages delivered. If there is less availability of fund, low cost promotional input is used. More combination of promotion mix may prove more productivity. The decision is taken according to the availability of fund. Cost is given importance. A better approach will decide what promotional goals are to be achieved; and then the cost to be involved can be figured out.
4 Ingredients of Promotional Methods that Constitute the Promotion-mix
Product Promotion (Explained With Diagram)
30 Major Objectives of Sales Promotion
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