Week 11.1 Promotional Elements
Promotion is one of the 4Ps of marketing. You have learned about the marketing mix elements (the 4Ps) in earlier lessons. Marketing mix elements are under the control of the company.
We will cover five promotional tools. Businesses can use one or more of these five promotional alternatives:
- personal selling,
- public relations,
- sales promotion, and
- direct marketing.
The table below presents these five promotional elements along with the strengths and weaknesses of each element.
|Promotional Element||Mass or Customized||Payment||Strengths||Weaknesses|
||Fees paid for space or time
Efficient means for reaching large numbers of people
High absolute costs
||Fees paid to sales people as either salaries or commissions
Can select audience
Can give complex information
Extremely expensive per contact
Messages may differ between salespeople
||No direct payment to media
||Often most credible source in the consumer's mind
||Difficult to get media cooperation
||Wide range of fees paid, depending on promotion selected
Effective at changing behaviour in the short run
Can lead to promotion wars
||Cost of communication through mail, telephone, or computer
Messages can be prepared quickly
Facilitates relationship with customer
Declining customer response
Database management is expensive
Three of the five promotional elements—advertising, sales promotion, and public relations—are often said to use mass selling. Mass selling refers to the promotional element that reaches out to groups of prospective buyers, rather than making individual contact with each potential buyer.
Personal selling and direct marketing use customized interaction between a seller and a prospective buyer. Personal selling can be done face-to-face, over the telephone, and with interactive electronic communication. Direct marketing also uses messages customized for specific customers.
We will cover the five promotional elements in more detail in this lesson.
Advertising is a paid form of non-personal communication about an organization, good, service, or idea, by an identified sponsor. Advertising can be done by mass media including TV, radio, and magazines. Marketers decide which medium is best for the particular product/service; it depends on the target audience. The medium of advertising should be carefully selected based on the interests of the target market. The message in the advertising should be consistent with the beliefs of that target market. Marketers must also make sure that the message will be understood.
Advantages of using advertising in the promotional mix:
- It can be attention-getting. Messages could be based on different appeals such as humour, fear, or sex appeal. We will cover these appeals in the coming lessons.
- It can communicate specific product benefits to prospective buyers. Advertising might help buyers understand the benefits of the product.
- Since businesses pay for the advertising space, they control what they want to say and to whom the message is sent. They also decide when to send the message, which includes how often.
- Since advertising is non-personal, it is sent to many potential buyers at once. Once the message is created, the same message is sent to the entire target market.
Disadvantages of using advertising in the promotional mix:
- The costs to produce and place a message are significant. This is known as high absolute costs. However, the cost per contact is not too high since the same message reaches out to mass consumer segments.
- Advertising does not have an immediate feedback loop. The target audience receives the message, but it is not possible to get immediate feedback about how the message made the prospective buyers feel. As a result, the lack of direct feedback makes it difficult to know how well the message was received. In personal selling, on the other hand, the seller receives immediate feedback from the potential buyer.
The most important characteristic of personal selling is the two-way flow of communication between a potential buyer and seller. The goal is to influence a potential buyer's purchase decision.
Personal selling is more advantageous than advertising in two ways:
- Unlike advertising, personal selling is usually face-to-face communication between the sender and receiver. It allows for direct feedback. When the salesperson hears the potential buyer's reaction to the message, s/he can modify the message if the feedback is adverse.
- Personal selling can communicate complex information. Two-way communication allows the seller to explain complex information and to answer questions. In advertising, the message is limited by the time it is presented in the media, and there are no questions/answers.
There are disadvantages of personal selling as well:
- The message can differ between different salespeople. Salespeople can change the message based on the conversation and feedback they receive from the potential buyer. There is not a consistent communication given to all customers.
- Personal selling is the most expensive of the five promotional elements per contact.
Public relations is a form of communication management that reaches out to stakeholders of the company in order to influence their feelings, opinions, and beliefs.
Examples: Public relations can take many forms including special events sponsorship, lobbying efforts, annual reports, press conferences, and social media. Image management may be used by a public relations department.
Publicity often plays the most important role. Publicity is a non-personal, indirectly funded presentation of an organization, good, or service.
Examples of publicity include a news story or editorial about the company or its products/services.
The biggest difference between publicity and both advertising and personal selling is the payment method. There is no direct payment in publicity. The media produces and runs the news story without any payment by the company. Of course it does not mean that publicity is entirely free. It is indirectly paid. Businesses do not pay for space in a mass medium (such as TV or radio), instead, the company must employ public relations staff and pay their salaries for their efforts.
The biggest advantage of publicity is its credibility. People tend to believe what they see in news stories and editorials. Most of such stories are in favour of the company and its products/services, and there is a tendency to believe it.
The biggest disadvantage of publicity is the lack of the business's control over it. A public relations (PR) department does its best to invite a news team to preview its innovative production facility and hopes that the editorial will run on the 6 p.m. newscasts. However, there is no guarantee when this news story would air. The company has no control over the timing or whether the story will air at all. It is not possible to make arrangements regarding the air time or the alignment of air time with the time the target audience is watching. Many PR departments now are shifting their focus to facilitating and responding to online discussions.
Sales promotions are short-term inducements of value. They are offered to arouse interest in buying a good/service.
Examples include coupons, rebates, samples, and sweepstakes. We will examine these in more details in the next lesson.
The advantage of sales promotions is that they provide the incentive to buyers to purchase, and they are very effective in the short run. Sales promotions stimulate sales for a short term period.
There are some disadvantages of sales promotions:
- They are only temporary, so sales drop off when the deal ends. For that reason, many companies support sales promotions with advertising in order to convert the customer who tried the sales promotion into a long-term buyer.
- Sales promotions lose their effectiveness if they are used continuously. Customers begin to delay their purchases until a coupon is offered.
- Sales promotions become contagious among businesses. When some businesses apply sales promotions, consumers expect and demand similar promotions from competitive firms. Sales promotions are also easily duplicated in the market place.
Direct marketing uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet.
Examples are face-to-face selling, direct mail, catalogues, telephone solicitations, and direct response advertising on television, radio, print, e-mail, social media, etc.
The advantage of direct marketing is that it can be customized to match the needs of specific target markets. It is one of the fastest-growing forms of promotion.
Direct marketing has several disadvantages:
- It requires an up-to-date database with information about the target market. It is expensive and time consuming to develop and maintain a database.
- There is growing concern about privacy, which has led to a decline in response rates.
Critical Thinking Activity: You have seen five main promotional mix elements in this lesson along with their advantages and disadvantages. Think about which promotional mix element(s) can be applied to your company from the group project. Identify the reasons why the promotional elements you picked are the best for your company. Make sure to support your arguments with facts based on advantages/disadvantages of each promotional element, characteristics of the product/service provided by your company and your target market.