Marketing Mix | Promotion in Four P’s
As part of the marketing mix, promotion includes all activities that involve communicating with the customer about the product and its benefits and features. Once a company has worked on the product and price elements, it is time to start a conversation with the consumer about the product. This includes raising awareness through different mediums to increase sales, as well as to create and foster brand loyalty.
Information provided to the customer at this stage helps them in making purchase decisions regarding the product. Often, there is substantial cost associated with promotional activities. But since the result is often an increase in sales or customer loyalty, there is thought to be long term return on this investment. There are many ends that a company may try to reach through a promotion including but not limited to an increase in sales, acceptance of new products, brand equity creation and brand positioning, addressing competitor actions and rebranding.
In this article we will look at 1) role of promotion in the marketing mix, 2) objectives of promotional activities, 3) major targets of promotional campaigns, 4) the promotional mix, 5) types of promotional strategies, 6) managing promotion through the product life cycle, and 7) an example of the promotion mix in action.
ROLE OF PROMOTION IN THE MARKETING MIX
As briefly mentioned in the introduction, promotion is the communication aspect of the marketing mix. It is creating a channel for conversation with the targeted consumer base. Through promotion, the company aims to attract the customer’s attention and give them enough information about the product to foster enough interest to motivate them to purchase.
The team tasked with these activities will begin by understanding the dynamics of the target audience and deciding which modes of promotion are likely to help meet targets. Once the channel is decided, information from other elements of the mix is incorporated to ensure that the message sent corresponds to the actual product features, benefits and user experience. None of the elements of the marketing mix work in isolation. Instead a unified body of information acts as the source for all activities within these 4P’s. The available information is filtered to include those areas which will be most relevant to the target audience.
OBJECTIVES OF PROMOTIONAL ACTIVITIES
Different organizations have different expectations from their promotional activities. These expectations are developed into objectives which then shape the selection and execution of these activities. Some possible objectives of promotion for any company may include:
Often, a product or brand may need to create an identity within the market. For the most part, this applies to a new company, a new brand or a new product. But often it may also be needed in times of rebranding or building up a failing product. The aim then is to select those promotional activities that help inform the customer about the company and the product.
If the customer is already aware of the product or has been made aware through some activities, it becomes necessary to move them along to actual purchasing behavior. The aim here is to identify a need that the product fulfills and make sure that the customer recognizes this need as something that is unfulfilled for them.
Sometimes, a company may just need to provide necessary information regarding the product, its benefits, features or usage to the consumer. This may be the case if a new product is introduced into the market. Unique features or benefits may need to be explained. In other cases, a new feature on an existing product may need to be highlighted. In some cases, such as in instances where environmental impact or health scares may be in play, information about a change in business practices and company policy may need to be communicated.
A company may seek to enhance its sales through promotion. If sales have been lower than usual, then the aim may be to get them back up to target level by re-engaging old customers and encouraging new ones to try a product out. In other instances, the aim may be to increase sales further at certain times of the year such as near a major holiday. Free demonstrations or special deals may be used to reach these ends.
In situations where there are many competitors in the market, a company may seek to use promotional activities to differentiate its product in the market and make it stand out from the crowd. The focus here remains on those features, functionalities or benefits that may not be offered by a competitor or may not be offered so well.
Reinforce the Brand
One basic aim of a promotional activity may be to further strengthen the brand and its place in the market. This helps turn a first time purchases into a life time purchaser. This can also help create advocates for the product from within the customer base.
MAJOR TARGETS OF PROMOTIONAL CAMPAIGNS
Any promotional activity is usually designed with a specific target audience in mind. The activity is therefore created using messages, cues and information that they will respond to. Realistically, the major portion of any promotional budget is aimed at this specific targeted audience. However, there may be important fringe groups who may have an influence over the intended target or stake in the product. Some of these fringe groups may include:
- The Actual Audience – These are the current customers of the product as well as former customers and any potential new customers. The activity is created for these people specifically.
- Influencers – People or organizations that may have their own sphere of influence over the target audience make up this category. If a positive impact is made on these people, they may then use this influence to encourage sales. The media, opinion leaders, Trade associations and special interest groups are some of these influencers.
- Distribution Channel Members – The product is handled and provided to the customer through this channel making them an important category of targets. A retailer may choose to display a certain product in a more prominent position than the others if they believe in the product and its benefits.
- Other Companies – Communicating with other companies may open up opportunities to collaborate on joint ventures.
THE PROMOTIONAL MIX
There may often be a tendency to narrow down the focus of promotional activities to only advertising. Quite the opposite, there are a number of ways to approach the audience with information about the product. Increasingly, businesses feel the need to use both one directional and two sided means of communications to reach the customer.
Through the promotional mix, a company aims to fulfill two basic objectives. One is to make the customer aware that the product and brand exist. The other is to persuade them to actually pick this product over all others and continue to buy it.
Five Elements of the Promotional Mix
There are five methods that make up a promotional mix. A company may choose to use one or more of these in harmony to ensure a clear, effective and direct message reaches the customer. The selection of the portfolio of activities may depend on the company’s marketing and sales strategies and budget allocations. These five methods are:
- Advertising – This mode of promotion is usually paid, with little or no personal message. Mass media such as television, radio or newspapers and magazines is most often the carrier of these messages. Apart from these, billboards, posters, web pages, brochures and direct mail also fall in the same category. While this method has traditionally been one sided, advertisement over new media such as the internet may allow for quick feedback.
- Public Relations & Sponsorship – PR or publicity tries to increase positive mention of the product or brand in influential media outlets. These could include newspapers, magazines, talk shows and new media such as social networks and blogs. This could also mean allowing super users, or influencers to test the product and speak positively about it to their peers. This type of advertisement may or may not be paid. For example, sponsoring a major event and increasing brand visibility is a paid action. Sending free samples to a blogger then depends on their discretion and opinion and is not usually swayed by payment.
- Personal Selling – Opposite of the one directional promotional methods, direct selling connects company representatives with the consumer. These interactions can be in person, over the phone and over email or chat. This personal contact aims to create a personal relationship between the client and the brand or product.
- Direct Marketing – This channel targets specific influential potential users through telemarketing, customized letters, emails and text messages.
- Sales Promotions – These are usually short term strategic activities which aim to encourage a surge in sales. These could be ‘buy one get one free’ options, seasonal discounts, contests, samples or even special coupons with expiration dates.
Important Considerations in Promotional Decisions
Whenever a company sets out to design its promotional mix, it needs to consider the following points:
- Stage in the Product Lifecycle – During the beginning of the lifecycle, there may need to be more aggressive and informational advertising, while a slowdown in promotions may be seen during the later stages.
- Nature of the Product – If a product is not new in its usage or function, there may be less need for information and more focus on brand equity creation as well as on emotional aspects of the product.
- The Allocated and Available Budge – A certain total budget is set for promotional activities and these then need to be designed and executed within these constraints.
- Cultural Sensitivity – If a product is to be launched in a new international market or translated across markets, it becomes imperative to take into consideration local affiliations and sensitivities. These include both cultural and religious considerations. Often, these issues may even present themselves within one country.
- Target Market Composition – The people who make up the target market need to be considered before committing to a promotional mix. If a market is not tech savvy, then more traditional means may need to be employed. Conversely, an internet generation used to instant gratification may need to be provided more focused and targeted messages.
- Competitor Actions – The methods a competitor uses need to be taken into account as well. There may not be a need to spend money on a radical advertising method if a customer is using rudimentary methods for example.
TYPES OF PROMOTIONAL STRATEGIES
A company may use different strategies to promote its products. These can be broadly categorized as push and pull strategies. Both strategies differ in how the customer is approached.
As the name indicates, this is when the product is taken to the customer by the company. This is mostly used when the product is an impulse purchase or if the company has an established relationship with the customer base. Companies may sell directly from their showrooms or at tradeshows etc. Essentially, there is less need to create an advertising buzz and more to make the product readily available at retail outlets and showrooms. Push marketing may focus primarily on short term sales.
In the opposite approach, there is an attempt to pull customers towards the brand or product. Through mass media campaigns to sales promotions and personal references, a company attempts to create brand loyalty and attractiveness. Pull strategies may attempt to focus primarily on long term brand loyalty then high sales in the short term. A lot of media hype and mass campaigns are required to create sufficient interest and encourage customers to seek out the product on their own.
Most companies will use a mix of these two strategies at different points in time.
MANAGING PROMOTION THROUGH THE PRODUCT LIFE CYCLE
As briefly mentioned before, different stages of the product life cycle require different types of promotional activities and strategies. This will help prolong the life of the product.
- Introduction – At this stage, major promotional campaigns and activities will be designed and executed. A comprehensive promotional mix will be designed with full input from the rest of the marketing mix. The aim here is to provide detailed information about the product, its features and benefits. Special offers and sales promotions may also be used to pull in customers while in some markets push strategies may be used simultaneously employed.
- Growth – Once the product is established and accepted, there will be a shift in strategy from information to more emotional aspects. The aim is to increase brand awareness, create strong brand equity and foster long term customer loyalty.
- Maturity – By now the market may have matured and there may be stiff competition and similar products available. Promotional activities will now turn more persuasive and there may be an attempt to create product differentiation by highlighting specific benefits and features that fulfill needs and are unique.
- Decline – At this point, promotional activities may wind down to the occasional reminder that the product exists in an attempt to forestall the product’s eventual decline.
PROMOTIONAL MIX EXAMPLE
How Promotional Mix Helped Turn Skoda Around
Skoda has suffered dips and seen highs in its popularity as a brand over the course of its 100 year history. At its lowest point, there was a strong perception of an outdated brand with obsolete manufacturing techniques. Through a combination of new techniques, a new partner and an effective PR strategy, the brand was turned around and a new image created.
Public Relations at Skoda
There is no short term solution to change long held perceptions. If there is to be a long term change in perception, it needs to be achieved through sustained and consistent actions over a significant period of time. PR activities are an example of such a solution where positive messages are sent through different mediums to the public, eventually establishing a positive reputation over time.
The Image Problem
Skoda needed an image makeover in the UK where it was not taken seriously at all. In 1991, the brand was purchased by Volkswagen. This enabled the company to redesign its manufacturing and bring product quality and brand image at par with competitors in the UK and eventually the world.
Despite this shift, customer perception remained low, an unfortunate carry over from the past. Products were now updated and the brand able to offer more to the consumer. The challenge now was to educate the audience on these changes and bring about a change in perception.
The attempt at changing mindsets was divided up into two challenges. The first to move negative perceptions to neutral and the second to move neutral perceptions to positive. An integrated press and public relations plan was devised and rolled out to address the first challenge and communicate the changed company and product to the audience. Factory visits, meetings and interviews with designers and engineers, motor shows, sponsorships, displays at public arenas and well planned advertisement campaigns were part of this strategy. These efforts helped reduce the strong negative image and create the basis for further shift towards a positive image.
In attempting to address the second challenge, the company needed to encourage consumers to think about buying the product. This is not possible only through advertising for example, but needs a focus on building up the brand and what it stands for. This was done by emphasizing Skoda’s brand values through cars that were practical, reliable, functional and robust. This was also reiterated through a focus on quality and value for money for the customer among other things.
Through this PR effort, and subsequent important brand launches, the modern Skoda brand name was established allowing the company to step successfully into the future.