Chapter 13 - Marketing Mix, Place and Promotion
Lesson Objective: To understand the benefits and limitations of the various promotional methods
You know that Promotion is focused on informing and convincing customers to ultimately improve sales. But how exactly does it do it? There are various methods of promotion companies can make use of:
1. Advertising:
The simple use of medias (e.g. TV, radios, newspapers, magazines) to communicate with customers.
NOTE:
Local businesses and multinational businesses make use of advertisement in different proportions / levels.
Advertisements can be of two kinds:
Informative: simply providing information about the product, its price, how to use it, where to buy it, etc. It's a specially effective advertisement effort for new products which customers are not familiar with yet;
Persuasive: trying to convince customers that a product is better than the competitors' offerings and that customers should buy it.
2. Sales Promotion - A method which can be implemented in different ways:
Coupon:
- Usually a one-off opportunity or offering that customers can take advantage of when showing the coupon.
Point-of-Sale Displays in Shops:
- These are product displays strategically placed in shops to try to encourage sales.
Loyalty Cards and Reward Schemes:
- Used to encourage customers to keep on shopping and buying at a specific shop or from a given brand.
Competitions and Games With Rewards and Prizes:
- Gamification of shopping to remove shopping anxiety and motivate customers to buy more and more.
3. Personal Selling:
- One-on-one selling;
- Common for high profit (price) items (e.g. cars);
- Enables the seller to build a relationship with the customer and be convincing;
- It's an expensive method of promotion as just one customer is reached at a time and sales people are paid commissions.
4. Direct Mail:
- When leaflets are posted directly on potential customers' mail;
- It may be seem as 'junk' by customers receiving such promotions.
5. Sponsorship: when businesses invest on events to have their brands linked to those events;
There are, therefore, a number of Promotional methods available to companies. The choice / decision among methods is closely related to the company's Marketing Budget - all Marketing activities incur costs.
Understand, however, that although it's an investment and it costs - investment in promotion does not guarantee sales or success!
To finalize the Marketing Mix we shouldn't ignore one of the most important advancements in the field: the internet - which he has had great impact on all four elements: product, price, place, and promotion!
The way companies promote their products today has dramatically changed due to the raise of Internet and the new medias:
Ecommerce is another consequence of the internet that has changed Marketing: the way businesses sell, the place, and the price of their products:
Ecommerce Opportunities to Businesses | Ecommerce Threats to Businesses | Ecommerce Opportunities to Consumers | Ecommerce Threats to Consumers |
Larger Market: opportunity to sell products around the world; | Increased Competition: competing with businesses from all around the world; | Convenience: ordering from home at any time; | Fraud: some websites take customers' money and do not deliver on the product; |
Reduced Costs: less workers needed, less infrastructure; | Unfamiliarity: consumers are less likely to buy products from brands they don't know; | Wider Choice: consumers have access to many products which they would not have otherwise; | No Personal Service: no face-to-face contact, which is important for some customers and products; |
Better Information: companies can provide a lot of information to consumers on websites; | | Lower Prices: competition between ecommerce companies around the world reduces prices; | Hacking: consumers may have their personal and bank information stolen; |
| | Better Information: consumers have a lot of information regarding products and brands online (reviews, ratings, etc.) to aid their decision; | Returning Items: it can be expensive and inconvenient to return items to sellers when purchased online. |
To-Do-List:
Exam Practice Questions (p. 189)
Chapter 13 - Marketing Mix, Place and Promotion
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