Promotion & Promotional Strategy- Communication With Customers & Consumers

Question 1

What does it mean by Promotion?

Answer 1

• Promotion is communication with the targeted market segments.
• Promotion is the process of communicating effectively with the potential buyers.

Question 2

What is the Value chain thinking of the Promotion concept?

Answer 2

• Product distribution channels are often long and a product may pass through several hands before it reaches the final consumer.
• Intense competition among different firms in the same industry puts tremendous pressure on the promotional programs and raises the need for strong persuasive promotion
• The users must also be reminded about a product’s availability and its potential to satisfy in order to retain a place in the market

Question 3

What 3 services does Promotion provide?

Answer 3

1. Informs intermediaries as well as the ultimate consumers
2. Persuades the consumers who have many alternatives to choose from
3. Reminds the consumers of product’s availability & usefulness

Question 4

What are the Communication Objectives?

Answer 4

Communication objectives depend on the decision making stage AIDAS:
• Attention – create awareness (simple) & develop knowledge of benefits
• Interest – develop liking of favourable attributes and preference over competitors
• Desire – develop commitment & conviction to act
• Action – motivate purchase & reinforce decision
• Satisfaction – check post purchase satisfaction

Question 5

What does Promotion have to do with Consumers?

Answer 5

• As consumer incomes rise they demand a wide variety of differentiated products and
services i.e. shift from
– survival needs to
– socio-psychological needs such as status, esteem, distinction.
• Promotion contributes to possession utility.

Question 6

What are the Economics of Promotion?

Answer 6

Promotion is used either to

1. Shift demand curve rightwards i.e. increase the product demand
2. Alter the slope of demand curve i.e.
   i) make demand inelastic when price increases
   ii) make demand elastic when price decreases

Question 7

What are the Push & Pull Promotion strategies?

Answer 7

Promotional strategy determines how this communication will occur
• Push Strategy is aimed at intermediaries. Manufacturer targets distributors or retailers through personal selling
and sales promotions (trade promotions).
• Pull Strategy is directed primarily at the end
users. Manufacturers directly target the final consumer (consumer
promotions) who then demand the product from retailers.

Question 8

What are the 4 methods of Promotion?

Answer 8

The four major tools available to the marketer in the promotion mix are

1. Advertising
2. Sales Promotion 3. Public Relations 4. Personal Selling

Question 9

What is meant by Advertising?

Answer 9

Advertising is paid promotion to mass audience. It is the most pervasive method of promotion & uses
• paid for broadcast (TV & radio)
• print media (newspapers & magazines)
• direct mail, billboards, posters on buses taxis
• more recently internet (banners, google add words, news story links, YouTube adds.
Advertisement is expensive but it represents an investment in the sales
process

Question 10

What is meant by Sales Promotion?

Answer 10

2.Sales Promotion – short-term temporary incentive to encourage purchase of a product by consumers or customer (often used in combination with advertisement).
For consumers it includes:
• Free samples to experience the benefit & features of the product
• Premium offer i.e. given free or sold at heavily discounted price e.g. Dan Murphy’s or BWS
• Loyalty programs to encourage repeat purchases e.g. Knights meat
• Contests to think about and / or promote product benefits to the consumers e.g.
BWS, Kellogg’s, Coca Cola
• Coupons that offer a price discount e.g. Dominos
• Discounts offers that provide a certain amount off the regular price on a product or service e.g. Woolworths Petrol
• In store displays
Trade promotion, when sales directed to the members of the distribution channel. Major examples are conventions & trade shows

Question 11

What is Personal Selling?

Answer 11

• Personal Selling - direct interaction between a company representative with a product to sell, and a firm
that needs the product.
• Sales staff do oral face to face presentations
• Most expensive form of promotion on a per-customer basis and therefore it should only be chosen if it offers clear benefits in comparison to advertising or sales promotion

Question 12

What is meant by Public Relations?

Answer 12

3.Public Relations encompasses a wide variety of communication efforts to contribute to favourable attitudes towards an organization and its products. Examples include
• support of charitable events e.g. McHappy Day • community events e.g. Nestle
• event sponsorships e.g. Sanitarium Triathlon or Gatorade
• press conference, media release, newsletters and annual reports
• lobbying

Question 13

What is meant By Commodity Promotion?

Answer 13

• Commodity Promotion for a nearly homogenous product takes place to disseminate information about the underlying attributes of the product to existing and potential consumers for the purpose of strengthening demand for the product.
• Products that cannot be differentiated are considered cooperative goods. Advertising these goods may increase the total demand, but it cannot change the market share among sellers.