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Promotion Marketing

Promotion Marketing

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:

  • Personal selling,

  • Advertising,

  • Direct marketing,

  • Public relations (PR),

  • Sales promotion.

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).

Steps of the sales process, StudySmarterFig. 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.

  • The physical environment: Promotion can occur in physical environments like brick-and-mortar stores or live events. Here, a brand ambassador or promotional model will represent a company to interact with the customer.

  • 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.

Check out our explanation of Product Life Cycle Stages to learn more.

Promotion marketing The product life cycle StudySmarterFig. 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:

  1. Need recognition

  2. Information search

  3. Consideration of alternatives

  4. Purchase decision

  5. 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.

Frequently Asked Questions about Promotion Marketing

There are various marketing promotions. Personal selling, advertising, direct marketing, public relations, and sales promotions are the five primary promotion types. 

Promotion is one of the 4Ps of marketing (price, product, promotion, place). Marketing promotions are tools that help companies communicate with customers and inform them about a product. 

Promotion is an important marketing function as it helps make a product or service known to the customer. The right promotional strategy also enables a company to reach more customers, generate higher sales, and increase customer loyalty and market share. 

The aims of promotion in marketing include:


  • Increasing brand awareness,

  • Bringing more customers on board,

  • Building relationships with existing customers,

  • Breaking into a new market segment. 

Cross-promotion in marketing refers to two or more brands (that are not competing) joining forces to target the same customer group.

Final Promotion Marketing Quiz

Question

The promotion mix is also referred to as the ______ mix.

Show answer

Answer

communications

Show question

Question

The __________ stands for: differentiate, reinforce, inform, and persuade.

Show answer

Answer

DRIP framework

Show question

Question

What is the promotion mix?

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Answer

The promotion mix is a combination of promotional tools marketers use to communicate with their target audience.

Show question

Question

There are six key promotional tools which make up the communications mix:


  1. Advertising, 

  2. __________, 

  3. Sales promotions, 

  4. ___________,

  5. ___________,

  6. Branding.

Show answer

Answer


  1. Advertising, 

  2. Personal selling, 

  3. Sales promotions, 

  4. Direct marketing, 

  5. Public relations (PR), 

  6. Branding.

Show question

Question

The __________ are the stages a customer passes through before making a purchase.

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Answer

buyer-readiness stages

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Question

Most communications campaigns aim to guide the customer through the buyer-readiness stages.

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Answer

True

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Question

Name the six buyer-readiness stages.

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Answer

The buyer readiness stages include awareness, knowledge, liking, preference, conviction, and purchase.

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Question

The promotion mix is made up of two key elements: the promotion mix budget and tools.

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Answer

False

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Question

To use the ________ method, marketers have to define the objective of the promotion and figure out how the company should allocate resources to achieve set goals

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Answer

objective-task

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Question

The _______ method involves setting the promotion budget to match industry averages

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Answer

competitive parity

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Question

After subtracting total costs from revenues or forecasted revenues, managers determine how much of the remainder to allocate to promotion. This method is known as:

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Answer

the affordable method

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Question

Brands can use a variety of traditional and digital ________ to create awareness and engagement. 

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Answer

advertisements

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Question

Although sales promotions are effective in the short term, they are ineffective for building long-term customer relationships.

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Answer

True

Show question

Question

________ can reach segments that do not respond to advertisements.

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Answer

Public relations

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Question

________ is especially important in the B2B context.

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Answer

Personal selling

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Question

________ is effective at reaching a specific target group or demographic.

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Answer

Direct marketing

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Question

What are promotions?

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Answer

Promotions are used by a company or brand to grow or improve consumers' perception of the promoted asset and to raise sales.

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Question

Product promotions are a common marketing tactic used by large and small companies alike in the effort to attract new clients.

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Answer

True

Show question

Question

What is the primary objective of product promotion?

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Answer

To bring attention to a new brand or specific item. 

Show question

Question

The addition of a new speciality menu item at a restaurant or implementing a buy-one-get-one-free discount at a grocery store is an example of _______. 

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Answer

Marketing promotion

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Question

Promotion strategies  focused on attracting new customers, can be done through _______________.

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Answer

Introductory offers and promotional events.

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Question

Promotion strategies focused on rewarding existing customers, are done by offering ___________ only to those who have already registered with or purchased from the company. 

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Answer

unique products, services, and subscription packages

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Question

What are some promotion methods?

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Answer

Social media promotion or direct marketing

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Question

What are some promotion types?

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Answer

Promotion types may include general advertising, mass email marketing, advertising positive customer reviews, exclusive previews of new products, etc. 

Show question

Question

What do promotions geared toward attracting new customers include?

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Answer

  • General advertising.
  • Mass email marketing.
  • Advertising positive customer reviews.
  • Producing more "organic" advertising content through blog posts and social media posts.

Show question

Question

What do promotions aimed at maintaining brand loyalty include?


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Answer

  • Direct email advertising.
  • Deals on upgrades for existing purchases.
  • Deals on trade-ins of existing purchases.
  • Exclusive previews of new products.
  • Contests and giveaways for existing customers.

Show question

Question

General advertising is a type of promotion used to  ____________.

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Answer

Attract new customers

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Question

Mass email marketing is a type of promotion used to  ____________.

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Answer

Attract new customers

Show question

Question

Advertising positive customer reviews is a type of promotion used to _____________.

Show answer

Answer

Attract new customers

Show question

Question

Deals on upgrades for existing purchases is a type of promotion used to _____________.

Show answer

Answer

Attract new customers

Show question

Question

Exclusive previews of new products is a type of promotion used to _____________.

Show answer

Answer

Increase brand loyalty

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Question

What is a promotion?

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Answer

Promotion refers to making a product or service known to the customer.

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Question

Promotion is part of the 4Ps of the marketing mix, along with:

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Answer

place

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Question

______________ are tools that help companies communicate with customers and inform them about a product. 

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Answer

marketing promotions

Show question

Question

We can break promotional decisions down into _____ steps. 

Show answer

Answer

seven

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Question

What are the seven steps to making promotional decisions?

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Answer

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.

Show question

Question

What are the five types of promotion?

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Answer

  • Personal selling,

  • Advertising,

  • Direct marketing,

  • Public relations (PR),

  • Sales promotion.

Show question

Question

Personal selling is when a sales representative meets customers to carry out a transaction.

Show answer

Answer

True

Show question

Question

Advertising messages are targeted at individuals.

Show answer

Answer

False

Show question

Question

__________ is the practice whereby companies gain attention by disseminating news and topics of public interest.

Show answer

Answer

Public relations

Show question

Question

What is direct marketing?

Show answer

Answer

Direct marketing is the technique of pre-selecting a specific group of customers to promote your product to.

Show question

Question

Sales promotions refer to long-term campaigns which create demand for a product or service.

Show answer

Answer

False

Show question

Question

Sponsorships involve paying an event, person, or organization to promote your products or services.

Show answer

Answer

True

Show question

Question

___________ ranges from print media, such as newspapers and magazines, to electronic media, like radio and television.

Show answer

Answer

Traditional media

Show question

Question

__________ is a way of interacting with customers via the Internet and social networking platforms.

Show answer

Answer

Digital media

Show question

Question

What are the five stages of the customer journey?

Show answer

Answer

  1. Need recognition

  2. Information search

  3. Consideration of alternatives

  4. Purchase decision

  5. Post-purchase evaluation

Show question

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