When a business develops new products and services, it must introduce these new product developments to the right customer groups. How can companies ensure that customers know about their new products or brands? Through promotion marketing. Let's take a look at the different types of promotion in marketing.
Definition of Marketing Promotion
Before we dive deep into promotion marketing strategy, let's look at the definition of promotion.
Promotion refers to making a product or service known to the customer.
Together with product, pricing, and place, it makes up the 4Ps of the marketing mix to help a business achieve its financial goals. The right promotional strategy enables a company to reach more customers, generate higher sales, and increase customer loyalty and market share.
Promotion decisions refer to the identification of promotional goals as well as the resources and tools needed to achieve those goals.
As a result, we define marketing promotion as follows.
Marketing promotions are tools that help companies communicate with customers and inform them about a product.
Promotional Decision Process
We can break promotional decisions down into seven steps. They are as follows:
Step 1: Defining problems
This step determines the need for a promotional strategy by considering the type of product or service to be promoted, the target audience, the marketing budget, and branding messages.
Step 2: Establishing objectives
After the problems are defined, the next step is to determine your promotion's end goal or objectives. This step answers the question: What do you promote a product or service for?
Some common promotional goals include:
Increasing brand awareness,
Bringing more customers on board,
Building relationships with existing customers,
Breaking into a new market segment.
Step 3: Designing promotion mix
During this step, marketers create a promotion mix. A promotional mix is a combination of promotional strategies used in a promotional campaign. Examples include personal selling, email marketing, sales promotions, print ads, social media advertising, etc.
Step 4: Planning the promotion program
In this step, you plan how long the business will carry out the promotional campaign and the tools that should be used. The marketer will consider the promotion's budget, resources, objectives, and size.
Step 5: Pre-testing
After the plan is complete, it's time to test it before implementing it full-scale. During the testing, marketers should pay close attention to the additional promotional costs, customer responses, and unexpected issues that arise.
Step 6: Implementation
If the testing results prove positive, the plan is ready to launch full-scale. If not, more planning is needed to avoid extra costs during the implementation.
Step 7: Monitoring and evaluation
Marketers should monitor the performance of the promotional campaign regularly for improvement. The company should consider external factors such as economic recession, seasonal variations, and natural disasters, which can affect the customer's decisions.
Types of Promotion Marketing
We can adopt many types of promotional strategies in a promotional campaign. The five most popular ones are:
Let's dive into each of these in further detail.
Personal Selling
The first promotional tool is personal selling.
Personal selling is when a sales representative meets customers to carry out a transaction.
It can be conducted face-to-face or via telemarketing. Personal selling is based on the sales process, which consists of nine steps (see Figure 1 below).
Fig. 1 - Steps of the Sales Process
Advertising
We tend to immediately think of advertising when considering promotions; however, this is only one of the five primary promotional tools.
Advertising is a type of promotion whereby companies pay to communicate their messages.
The message in advertising is directed to the mass audience instead of a specific individual, like in personal selling.
Advertisements can appear in traditional media like press, magazines, and radio or digital media such as blogs and social media. We can further classify them based on the target audience, marketing type, and purpose.
Check out our explanations of Advertising and Advertising Media to learn more.
Direct marketing
Direct marketing is the technique of pre-selecting a specific group of customers to promote your product to.
Marketers can deliver promotional messages via texts, emails, newspapers, or TV commercials. Customers are also provided with a method for a direct response, such as a hotline to place an order.
Find out how direct marketing differs from other marketing techniques by reading our explanation of Direct Marketing.
Public relations (PR)
Public relations is the practice whereby companies gain attention by disseminating news and topics of public interest.
Companies can conduct public relations for free in-house, as opposed to advertising which involves a fee for third-party promoters. One corresponding aspect of public relations is publicity, or how the customer perceives your product and service. While public relations is an internal process, publicity is contributed by external parties.
Sales Promotion Marketing
Sales promotions are short-term campaigns that create demand for a product or service. Examples include contests, coupons, giveaways, trade shows, and exhibitions.
Promotion Marketing Examples
Marketers can promote products on both online and offline platforms. The offline platforms consist of the physical environment, traditional media, and sponsored events, whereas the online platforms include different types of digital media.
Traditional media: The traditional form of media ranges from print media, such as newspapers and magazines, to electronic media, like radio and television. Placing billboards and banners in high-traffic areas is also a common form of traditional advertising.
Sponsored events: Sponsorships involve paying an event, person, or organization to promote your products or services. One example is when companies fund athletes and clubs to acquire ad spaces in sporting events.
Digital media: Digital media is a way of interacting with customers via the Internet and social networking platforms. For example, Gmail, blogs, Facebook, Instagram, LinkedIn, and Youtube. Unlike traditional advertising, advertising on these channels can be organic or paid. The main advantage of the virtual promotion is borderless distribution, which allows the company to reach as large an audience as possible. However, there's also the risk of system crashes or information overload.
Promotion Marketing Mix
Now that we understand the basics of promotion marketing let's take a look at some of the marketing mix and external factors that might influence promotion decisions in marketing.
The Stage of the Product Life Cycle
The first factor is the product's life cycle stage. There are four stages of a product's life cycle: introduction, growth, maturity, and decline (see Figure 2 below). These stages influence the type of promotional strategy.
- In the introduction stage, where awareness is low, companies may have to spend a lot on marketing expenses to create a demand.
- As customer awareness grows, the focus of marketing shifts to differentiating the product from the competitors.
- The maturity stage is the time for building customer loyalty and maximizing sales.
- During the decline stage, companies should invest more in reinforcing a positive brand image.
Fig. 2 - The Product Life Cycle
Product Types
The promotional strategy might also vary based on the product type. Different types of products require various promotional tools.
Popular consumer goods like Coca-Cola beverages and McDonald's hamburgers can benefit significantly from commercials, whereas personal selling is more suitable for high-end products like cars or jewelry.
Competition
The level of competition in the market also affects your promotional efforts.
In paid search advertising, companies pay to rank higher for a particular keyword on the search engine. As there are multiple keywords with different search volumes and high levels of difficulty to rank, markers must invest a lot of time and effort in finding the right keyword for their campaign.
Marketing Budget
Marketing budgets also influence promotional activities.
To avoid marketing on the wrong promotional channel, learning about your target customer's true needs and wants is important. Marketers can do this through market research and mapping out a customer journey.
Typically, there are five stages to a customer's journey:
Need recognition
Information search
Consideration of alternatives
Purchase decision
Post-purchase evaluation
Knowing which stage your target audience is in will help you choose the right method of promotion and deepen customer connection.
External Environment
Regulations also affect the promotion of your product or service. For example, TV commercials about tobacco products are banned in many countries, and violations of this regulation can lead to hefty fines.
Another important consideration for a promotional strategy is the strength of the economy.
Consumers might expect discounts or coupons for a product or service during an inflationary period. The lack of incentives can deter them from buying.
Promotion Marketing Strategy
Decisions on how a promotion campaign should be carried out depend on the marketing strategies used. Overall, there are three ways to promote products:
A push strategy involves 'pushing' the product to the customer. Push strategies start with the product's producer, who pushes their marketing communications through various channels to intermediaries who eventually promote the product to the final consumer. Some examples include trade shows and direct selling.
A pull strategy involves directing communications efforts to the final customer and building up customer demand in less "pushy" ways, such as advertising, sales promotion, and referrals.
The mixed strategy combines both the push and pull factors.
Only large brands can afford expensive forms of advertising like TV commercials or sports event sponsorship. Smaller businesses with limited funds may employ less costly personal selling and lower-scale promotional approaches.
Promotion Marketing - Key takeaways
- Promotion refers to making a product or service known to the customer. Its goal is to increase brand awareness, build customer loyalty, and generate more sales.
- Promotion decisions refer to the identification of promotional goals as well as the resources and tools needed to achieve those goals.
- There are seven steps to making a promotional decision: 1. Problem definition 2. Establishment of objectives 3. Design of promotion mix 4. Plan sales promotion program 5. Pre-testing 6. Implementation 7. Monitoring and evaluation.
- There are five primary types of promotion in marketing: personal selling, advertising, direct marking, sales promotion, and public relations.
- Marketers can promote products on online channels (digital media) and offline channels (stores, sponsored events, traditional media).
- Many factors might influence your promotional decisions, including the stage of the product life cycle, product type, marketing budget, target market and competition, regulation, and economic strength.
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