promotion

PROMOTION

It is no longer enough for a business to have great products.  Lots of businesses have those too.  Customers need to know about a great product and be persuaded to buy.  That is the role of promotion.

Promotion is all about communication.  Why because promotion is the way in a business makes its products known to the customers, both current and potential.

The main aim of promotion is to ensure that customers are aware of the existence and positioning of products. Promotion is also used to persuade customers that the product is better than competing products and to remind customers about why they may want to buy. The five types of objectives for promotional activities are:

-         to provide information

-         to increase demand

-         to differentiate the product

-         to accentuate the value of the product

-         to stabilize sales

It is a common mistake to believe that promotion by business is all about advertising.  It isn’t. There are a variety of approaches that a business can take to get their message across to customers, although advertising is certainly an important one.

It is important to understand that a business will use more than one method of promotion. The variety of promotional methods used is referred to as the promotional mix.

Which promotional methods are used depends on several factors:

-          Stage in the life cycle - e.g. advertising is important at the launch stage

-          Nature of the product - how much information is required by customers before they buy

-          Competition - what are rivals doing?

-          Marketing budget - how much can the firm afford?

-          Marketing strategy - other elements of the mix (price, product, place etc)

-          Target market - appropriate ways to reach the target market

The main methods of promotion are:

-           Advertising

-          Public relations & sponsorship

-          Personal selling

-          Direct marketing

-          Sales promotion

SALES PROMOTION

Sales promotion is the process of persuading a potential customer to buy the product.  Sales promotion is designed to be used as a short-term tactic to boost sales – it is not really designed to build long-term customer loyalty.

Some sales promotions are aimed at consumers.  Others are targeted at intermediaries (such as agents and wholesalers) or at the firm’s sales force.

When undertaking a sales promotion, there are several factors that a business must take into account:

• What does the promotion cost – will the resulting sales boost justify the investment?
• Is the sales promotion consistent with the brand image?  A promotion that heavily discounts a product with a premium price might do some long-term damage to a brand
• Will the sales promotion attract customers who will continue to buy the product once the promotion ends, or will it simply attract those customers who are always on the look-out for a bargain?

There are many methods of sales promotion, including:

• Money off coupons – customers receive coupons, or cut coupons out of newspapers or a products packaging that enables them to buy the product next time at a reduced price
• Competitions – buying the product will allow the customer to take part in a chance to win a prize
• Discount vouchers – a voucher (like a money off coupon)
• Free gifts – a free product when buy another product
• Point of sale materials – e.g. posters, display stands – ways of presenting the product in its best way or show the customer that the product is there.
• Loyalty cards – e.g. Nectar and Air Miles; where customers earn points for buying certain goods or shopping at certain retailers – that can later be exchanged for money, goods or other offers

Loyalty cards have recently become an important form of sales promotion.  They encourage the customer to return to the retailer by giving them discounts based on the spending from a previous visit. Loyalty cards can offset the discounts they offer by making more sales and persuading the customer to come back.  They also provide information about the shopping habits of customers – where do they shop, when and what do they buy?  This is very valuable marketing research and can be used in the planning process for new and existing products.

The main advantages and disadvantages of sales promotion are:

Advantages	Disadvantages
Effective at achieving a quick boost to sales Encourages customers to trial a product or switch brands	Sales effect may only be short-term Customers may come to expect or anticipate further promotions May damage brand image

TYPE PROMOTION

In order to effectively promoting the need for the promotion mix, which is the optimal combination for different types of activities or selection of the most effective promotional activities to increase sales. There are four types of promotional activities, among others: (Kotler, 2001:98-100)

1. Advertising (Advertising), a form of non-personal promotion by using a variety of media aimed to stimulate purchases.
2. Face to Face Sales (Personal Selling), which is a personal form of promotion by an oral presentation in a conversation with a prospective buyer who intended to stimulate purchases.
3. Publicity (Publisity), a form of non-personal promotion of the service, or a particular business entity with the way this information / news about it (mostly scientific).
4. Sales Promotion (Sales promotion), which is a form of promotion beyond the three forms above are intended to stimulate purchases.
5. Direct Marketing (Direct Marketing), a form of personal selling directly intended to influence consumer purchases.

 Promotion of sales made by the seller can be broken down by objectives. Groupings are as follows:

1.           Customer promotion, that promotion aimed at encouraging or inducing customers to buy.

2.        Trade promotion, sales promotion which aims to stimulate or encourage wholesalers, retailers, exporters and importers to trade goods / services from sponsors.

3.           Sales-force promotion, sales promotion which aims to motivate the sales force.

4.       Business promotion, sales promotion which aims to acquire new customers, retain contractual relationships with customers, introduce new products, sell more to existing customers and educate customers.

But clearly any kind of needs to be programmed to be affected, remains the company's planning how to continue to exist and thrive. Moreover, if the company has a product line of more than one kind.

There are 3 main ideas in a business plan put forward by Kotler-AB. Susanto (2000: 80)

1. That the company's business should be like "Investment Portfolio", ie need to decide which business can be developed, maintained, reduced or even be stopped. Because every business has their respective advantages and corporate resources must be managed in accordance with the potential benefit. 
2. Oriented to the future profit potential by considering the market growth rate and position as well as the suitability of the company. It's not enough to rely on sales and profits has been achieved in the previous year as a guide. 
3.  Strategy. The Company shall have and establish an action plan to achieve long-term goals by looking at the position of the industry (see Identification Competitor), goals, skills and opportunities of corporate resources.

PROMOTION

It is no longer enough for a business to have great products.  Lots of businesses have those too.  Customers need to know about a great product and be persuaded to buy.  That is the role of promotion.

Promotion is all about communication.  Why because promotion is the way in a business makes its products known to the customers, both current and potential.

The main aim of promotion is to ensure that customers are aware of the existence and positioning of products. Promotion is also used to persuade customers that the product is better than competing products and to remind customers about why they may want to buy. The five types of objectives for promotional activities are:

-         to provide information

-         to increase demand

-         to differentiate the product

-         to accentuate the value of the product

-         to stabilize sales

It is a common mistake to believe that promotion by business is all about advertising.  It isn’t. There are a variety of approaches that a business can take to get their message across to customers, although advertising is certainly an important one.

It is important to understand that a business will use more than one method of promotion. The variety of promotional methods used is referred to as the promotional mix.

Which promotional methods are used depends on several factors:

-          Stage in the life cycle - e.g. advertising is important at the launch stage

-          Nature of the product - how much information is required by customers before they buy

-          Competition - what are rivals doing?

-          Marketing budget - how much can the firm afford?

-          Marketing strategy - other elements of the mix (price, product, place etc)

-          Target market - appropriate ways to reach the target market

The main methods of promotion are:

-           Advertising

-          Public relations & sponsorship

-          Personal selling

-          Direct marketing

-          Sales promotion

SALES PROMOTION

Sales promotion is the process of persuading a potential customer to buy the product.  Sales promotion is designed to be used as a short-term tactic to boost sales – it is not really designed to build long-term customer loyalty.

Some sales promotions are aimed at consumers.  Others are targeted at intermediaries (such as agents and wholesalers) or at the firm’s sales force.

When undertaking a sales promotion, there are several factors that a business must take into account:

• What does the promotion cost – will the resulting sales boost justify the investment?
• Is the sales promotion consistent with the brand image?  A promotion that heavily discounts a product with a premium price might do some long-term damage to a brand
• Will the sales promotion attract customers who will continue to buy the product once the promotion ends, or will it simply attract those customers who are always on the look-out for a bargain?

There are many methods of sales promotion, including:

• Money off coupons – customers receive coupons, or cut coupons out of newspapers or a products packaging that enables them to buy the product next time at a reduced price
• Competitions – buying the product will allow the customer to take part in a chance to win a prize
• Discount vouchers – a voucher (like a money off coupon)
• Free gifts – a free product when buy another product
• Point of sale materials – e.g. posters, display stands – ways of presenting the product in its best way or show the customer that the product is there.
• Loyalty cards – e.g. Nectar and Air Miles; where customers earn points for buying certain goods or shopping at certain retailers – that can later be exchanged for money, goods or other offers

Loyalty cards have recently become an important form of sales promotion.  They encourage the customer to return to the retailer by giving them discounts based on the spending from a previous visit. Loyalty cards can offset the discounts they offer by making more sales and persuading the customer to come back.  They also provide information about the shopping habits of customers – where do they shop, when and what do they buy?  This is very valuable marketing research and can be used in the planning process for new and existing products.

The main advantages and disadvantages of sales promotion are:

Advantages	Disadvantages
Effective at achieving a quick boost to sales Encourages customers to trial a product or switch brands	Sales effect may only be short-term Customers may come to expect or anticipate further promotions May damage brand image

TYPE PROMOTION

In order to effectively promoting the need for the promotion mix, which is the optimal combination for different types of activities or selection of the most effective promotional activities to increase sales. There are four types of promotional activities, among others: (Kotler, 2001:98-100)

1. Advertising (Advertising), a form of non-personal promotion by using a variety of media aimed to stimulate purchases.
2. Face to Face Sales (Personal Selling), which is a personal form of promotion by an oral presentation in a conversation with a prospective buyer who intended to stimulate purchases.
3. Publicity (Publisity), a form of non-personal promotion of the service, or a particular business entity with the way this information / news about it (mostly scientific).
4. Sales Promotion (Sales promotion), which is a form of promotion beyond the three forms above are intended to stimulate purchases.
5. Direct Marketing (Direct Marketing), a form of personal selling directly intended to influence consumer purchases.

 Promotion of sales made by the seller can be broken down by objectives. Groupings are as follows:

1.           Customer promotion, that promotion aimed at encouraging or inducing customers to buy.

2.        Trade promotion, sales promotion which aims to stimulate or encourage wholesalers, retailers, exporters and importers to trade goods / services from sponsors.

3.           Sales-force promotion, sales promotion which aims to motivate the sales force.

4.       Business promotion, sales promotion which aims to acquire new customers, retain contractual relationships with customers, introduce new products, sell more to existing customers and educate customers.

But clearly any kind of needs to be programmed to be affected, remains the company's planning how to continue to exist and thrive. Moreover, if the company has a product line of more than one kind.

There are 3 main ideas in a business plan put forward by Kotler-AB. Susanto (2000: 80)

1. That the company's business should be like "Investment Portfolio", ie need to decide which business can be developed, maintained, reduced or even be stopped. Because every business has their respective advantages and corporate resources must be managed in accordance with the potential benefit. 
2. Oriented to the future profit potential by considering the market growth rate and position as well as the suitability of the company. It's not enough to rely on sales and profits has been achieved in the previous year as a guide. 
3.  Strategy. The Company shall have and establish an action plan to achieve long-term goals by looking at the position of the industry (see Identification Competitor), goals, skills and opportunities of corporate resources.