OBJ. 4.01B – EXPLAIN THE TYPES

OF PROMOTION

Unit 7 - PROMOTION

Product Promotion

A promotional method used by businesses to convince prospects to select their goods and services instead of a competitor’s brand.

 

Types of Product Promotion

PrimarySecondary

Primary Product Promotion

Emphasis is on the product and its uses, and not on a particular brand. Primary product promotion aims to stimulate demand or consumer desire for an entire class of goods and services. Competition is between the two different industries. This type promotion useful when introducing a new concept or a totally new product.

 

Secondary Product Promotion

Also known as selective product promotion. Secondary product promotion is used to stimulate the demand for a specific brand of a product. Used to compete against other makers of the same type of product.

Uses of Product Promotion

Creates consumer awareness of a good or service

Informs customers about product featuresEncourages interest in and inquiries about a

good or serviceInforms consumers where a product can be

purchasedBuilds a reputation for a productCreates excitement and motivates retailers

and salespeople

Institutional Promotion

Aka - corporate promotion: In Institutional advertising the company is the focus of the promotion instead of any products it sells

Institutional Promotion

three kinds of institutional promotion—public service, public relations, patronage.

Public Service Public service: Public service advertising is designed to inform the public

on issues that are frequently considered to be in the general best interests of the community at large. Typically, it reflects a political viewpoint, philosophical theory, religious concept or humanitarian notion.

It is also commonly referred to as a public service announcement (PSA) or a community service announcement (CSA). The ads are usually broadcast on radio or television, but may also appear in newspapers or magazines. They are prevalent in industrialized countries throughout the world.

PSAs are commonly aimed at altering public attitudes by raising consciousness about particular issues. Health, conservation and safety themes are prevalent in many PSAs. The public service advertising campaigns are often sponsored by trade associations, civic organizations, non-profit institutions or religious groups. The U.S. military, in addition to paid advertising, regularly produces PSAs as part of their recruitment efforts.

Some PSA ads use celebrity spokespersons to garner attention. Others attempt to appeal to the masses through portraying risks and issues relevant to ordinary men, women and children. A common misconception about public service advertising is that it includes political campaign ads, which are actually privately funded.  

Public Relations

Public relations provide a service for the company by helping to give the public and the media a better understanding of how the company works.

Within a company, public relations can also come under the title of public information or customer relations. These departments assist customers if they have any problems with the company. They are usually the most helpful departments, as they exist to show the company at their best.

People often have the perception of public relations as a group of people who spin everything. Spin can mean to turn around a bad situation to the company’s advantage. It is true that part of the purpose of public relations is to show the company in a positive light no matter what. http://www.wisegeek.com/what-is-public-relations.htm

Patronage

Continued support, loyalty and repeat business of customers. Customers (patrons) remain loyal to a business or company because they are satisfied with the company and trust and/or confidence has been established through past experiences

Uses of Institutional Promotion

• Change a particular attitude toward a firm or its products

In recent years, the tobacco industry has come under fire for promoting its products, which are associated with various forms of disease. In an effort to clean up this negative image, tobacco companies such as Philip Morris have been engaging in institutional promotions such as its QuitAssist program and resources for helping smokers kick the habit.

Uses of Institutional Promotion

• Inform customers of the company’s interest in social or environmental issues

Corporate giant IBM has a long-standing commitment to environmental leadership in the business world. The company has a written environmental-affairs policy and participates in many voluntary initiatives, such as membership in the Wildlife Habitat Council.

Uses of Institutional Promotion

• Inform the public about the company’s future

When wireless communication provider Verizon bought Alltel in 2009, the company engaged in a promotional campaign to let its customers and the general public know about the change.

Uses of Institutional Promotion

• Inform customers of the company’s name and its type of business

During the rise in the popularity of the Internet, many online travel agencies such as Expedia and Travelocity were born, and then they began promotions to let the public know about their services.

Uses of Institutional Promotion

• Show the company’s commitment to quality, technology, or research

The world’s largest research-based pharmaceutical company, Pfizer, uses institutional promotion to demonstrate to the

public its commitment to using research to help people live longer, healthier, happier lives.

Uses of Institutional Promotion

• Enhance company morale and recruit new

employeesBattelle, a global science and technology

corporation, holds many recruiting events and initiatives all over the country.

Uses of Institutional Promotion

• Build or reinforce a favorable company image

Coca-Cola’s $5 million donation of bottled water and other beverages to hurricane-ravaged New Orleans in 2005 is one example of institutional promotion meant to help build

a highly favorable company image.”

Advantages of Promotional Activities

Promotion is an important part of the marketing mix that communicates information about goods, services, images, or ideas to customers.

Promotion can accomplish a number of objectives— building awareness, increasing demand, differentiating a product from its competitors, highlighting a product’s value, changing or reinforcing customer attitudes.

Advantages of Promotional ActivitiesThey contribute to economic growth and business

activity, They support the mass communication media.

Companies benefit directly because these activities create awareness of the company and its products.

Customers benefit because these activities raise our standard of living and make us better educated customers who are able to make more intelligent purchases.

Create jobs due to the need to mass produce products based on customer demand.

Encourages consumers to purchase and use NEW and IMPROVED products

Disadvantages of Promotional ActivitiesThey can be deceptive, manipulative, and play on

consumers’ fears. They can be offensive and reinforce stereotypes. They have limited abilities. Product promotion does not add value to goods and

services.Institutional promotion can be costly and difficult to

measure.Promotion cannot make up for poor quality

productsPromotion cannot substitute for well-trained sales

staff/sales personPromotion cannot achieve major success