Effective promotion can be achieved via diversity of promotional methods. A mixture of promotional techniques is called a “promotional mix”.
Promotional mix, which is also referred to as promotional tools, consists of sales promotion, advertising, sponsorships, direct marketing, personal selling and public relations (publicity).
Sales promotion – refers to enhancing demand for the product or service by providing adequate short-term incentives to entice potential and current customers and distribution channels to purchase the product or service. It also can build awareness of the business’s existence and create goodwill.
Sales promotion basically includes any effort, other than advertising and personal selling, to persuade potential or current customer to purchase a product or service. An example of sales promotion can be a gift offered by manufacturer with the purchase of beauty products over a certain amount, such as over $35. Such promotions are regularly conducted for many brands such as beauty products Lancôme and Clinique. However, this strategy should be used with caution to ensure that value of the brand is maintained. Excessive use of promotions may be damaging for the brand.
Another example of usage of sales promotions is a company’s specialties (novelty items). Specialties refer to functional items such as calendars, shirts, pens, coffee mugs with the company’s name or slogan that are given as a gift to potential and current customers. Specialties help to continuously remind receivers of specialties about the company’s existence.
Advertising – Advertising refers to any paid and non-personal marketing communication in the mass media. Mass media may include television, magazines, newspapers, radio and cinema. Advertising assists in building awareness about the product or service offered as well as establishing confidence in the potential customers regarding reliability and attractiveness of the products and services.
The goal of the advertising is to entice potential and current customers to purchase products or services. To be effective, advertising must be for high quality products or services that meet real customers’ needs. Advertising for inadequate and low quality products or services, the purchase of which results in unsatisfied customers, can only work in the short-term. Advertising must be just a complement for a high quality and useful product or service.
Two types of advertising exist, product or service advertising and institutional advertising. Product or service advertising have a goal of enticing customers to purchase products or services of the business by promoting advantages that products offer as well as how the product can be used to meet customers’ needs. Institutional advertising builds awareness about company and confidence in potential and current customers with regards to the reliability and value adding aspects of the company and its products and services. Advertising can also be a combination of product or service and institutional advertising.
Advertising can be expensive. Management have to make sure that the return on investment in advertising is greater than cost of advertising by an acceptable amount.
Advertising, like other elements of the promotional mix, sometimes may need to be supplemented by other elements of the promotional mix such as personal selling. This may be necessary to “close the sale” since consumers may still have doubts regarding the purchase of the product or service offered.
Personal selling, however, is generally even more expensive than advertising. However, if the remuneration of sales people is mainly on a commission basis than personal selling is better for the cash flow position of a business compared to advertising. This is because, in the case of personal selling, cash outflow occurs only when sale is made compared to advertising where cash outflow occurs prior to closure of sales.
Sponsorships – Sponsorships refer to organisations providing support for an activity or event in the form of monetary or other resources with the intention to obtain recognition for support via publicity or advertising.
Direct marketing – focuses on obtaining an immediate response.
Personal selling – Personal selling refers to oral face to face (one to one) marketing communication with potential buyers. The goal of personal selling is to complete a sale as well as to build sustainable business relationships with the customer to ensure future sales.
To ensure effective personal selling, the sales person must have adequate knowledge of product or service. The sales person must also be presentable personally which can be achieved with professional dressing, grooming and friendly communication style. The sales person must be enthusiastic, friendly, be sincere, with best interests of customer in mind and be focused on a win-win rather than win-lose solution.
To identify new potential customers that can be persuaded to purchase products and services via personal selling, prospecting is often used. Prospecting refers to the systematic process of identification of potential customers.
Public relations (PR) – public relations refers to the activity of managing relationships with the media and obtaining positive reference concerning the business in the media, such as newspapers or magazines, without directly paying for such exposure. Such exposure (increased visibility) without directly paying for it is called publicity.
Publicity (PR) is a cost effective way to get exposure in the media. It helps to build awareness about the business. It also assists in enhancing customer confidence since customers may trust publicity more than they trust advertisements.
However, the negative aspect of publicity involves lack of control over what will be written or said about the enterprise. Therefore, occasionally negative publicity may occur, which may be harmful to the enterprise. Skilful handling of negative publicity is one of the goals and responsibilities of an effective public relations function.
All the above elements of the promotional mix are closely interconnected. The following example will illustrate this point. Assume the following situation. An individual may see an advertisement of the product in a magazine. A few days later a potential consumer may see mention regarding the company, that produces the earlier advertised product, in the newspaper (publicity). The mention may be regarding this company providing support for an activity that the individual considers to be worthy (sponsorship).
A day later the potential consumer receives a direct mail from the earlier mentioned company providing information regarding an upcoming promotion for the earlier advertised product (direct marketing).
A week later, when passing the product in the store, the potential customer may see that the information in the direct mail was correct and a special promotional free gift is available with the purchase of a product within that particular week (sales promotion).
However, at this point, the individual may still have questions or not be sure about the appropriateness of the purchase. Personal selling may be further required to answer potential customer’s questions and to highlight and summarize the benefits of the product.
Personal selling may also help to build relationships with the potential consumer so that ongoing sales may become more likely. Only than the sale is closed and a potential customer becomes an existing customer.
The above example clearly illustrates how a combination of all the elements in the promotional mix was essential to attract this particular customer to finally make the purchase. Each element of the promotional mix on its own may have not been adequate to entice this particular customer to purchase a product.