Promotion Decisions Tutorial

Those unfamiliar with marketing often assume it is the same thing as advertising. Certainly, our coverage so far in the Principles of Marketing Tutorials has stressed this is not the case. Marketing encompasses many tasks and decisions, of which advertising may only be a small portion. Likewise, when non-marketers hear someone talk about “promotion” they frequently believe the person is talking about advertising. While advertising is the most visible and best understood method of promotion, it is only one of several approaches a marketer can choose to promote their products and services.

In this tutorial we begin our discussion of the third major area of the marketing mix – promotion.

Many view promotional activities as the most glamorous part of marketing. This may have to do with the fact that promotion is often associated with creative activity undertaken to help distinguish an organization’s products from competitors’ offerings. While creativity is an important element in promotion decisions, marketers must also have a deep understanding of how the marketing communication process works and how promotion helps the organization achieve its objectives.

What is Promotion?

The best way to define promotion is to say it is the general name given to forms of communication designed to reach a targeted audience with a certain message in order to achieve specific organizational objectives. Nearly all organizations, whether for-profit or not-for-profit, in all types of industries, must engage in some form of promotion. Such efforts may range from multinational firms spending large sums on securing high-profile celebrities to serve as corporate spokespersons to the owner of a one-person enterprise passing out business cards at a local businessperson’s meeting.

Like most marketing decisions, an effective promotional strategy requires the marketer understand how promotion fits with other pieces of the marketing puzzle (e.g., product, distribution, pricing, target markets). Consequently, promotion decisions should be made with an appreciation for how it affects other areas of the organization. For instance, running a major advertising campaign for a new product without first assuring there will be enough inventory to meet potential demand generated by the advertising would certainly not go over well with the company’s production department (not to mention other key company executives). Thus, marketers should not work in a vacuum when making promotion decisions. Rather, the overall success of a promotional strategy requires input from others in impacted functional areas.

In addition to coordinating general promotion decisions with other business areas, individual promotions must also work together. Under the concept of integrated marketing communication, marketers attempt to develop a unified promotional strategy involving the coordination of many different types of promotional techniques. The key idea for the marketer who employs several promotional options (we’ll discuss potential options later in this tutorial) to reach objectives for the product is to employ a consistent message across all options. For instance, salespeople will discuss the same benefits of a product as mentioned in television advertisements. In this way, no matter how customers are exposed to a marketer’s promotional efforts they all receive the same information.

Finally, as discussed below, promotion is not limited to the communication of product information to customers. Marketers also use promotional methods to communicate with others who are outside their target market.


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Targets of Marketing Promotions

The audience for an organization’s marketing communication efforts is not limited to just the marketer’s target market. While the bulk of a marketer’s promotional budget may be directed at the target market, there are many other groups that could also serve as useful targets of a marketing message. Targets of a marketing message generally fall into one of the following categories:

The Target Market

This category would include current customers, previous customers and potential customers, and as noted, may receive the most promotional attention.

Target Market Influencers

There exists a large group of people and organizations that can affect how a company’s target market is exposed to and perceives a company’s products. These influencing groups have their own communication mechanisms that reach the target market and the marketer may be able utilize these influencers to its benefit. Influencers include the news media (e.g., presents stories about a company), special interest groups, opinion leaders (e.g., doctors directing patients to purchase a product), and industry trade associations.

Channel Members

The distribution channel provides services to help gain access to final customers.  Yet in many ways channel members, and particularly resellers, also represent target markets for a marketer’s products. While their needs are different than those of the final customer, channel members must make purchase decisions when agreeing to handle a marketer’s product. Aiming promotions at distribution partners (e.g., retailers, wholesalers, distributors) and other channel members is extremely important and, in some industries, represents a higher portion of a marketer’s promotional budget than promotional spending directed at the final customer.

Other Organizations

The most likely scenario in which a marketer will communicate with another organization occurs when the marketer is probing to see if the other organization would have an interest in a joint venture, such as a co-marketing arrangement where two firms share marketing costs. Reaching out to other companies, including companies who may be competitors for other products, could help create interest in discussing such a relationship.

Other Organizational Stakeholders

Marketers may also be involved with communication activities directed at other stakeholders. This group consists of those who provide services, support or, in other ways, impact the company. For example, an industry group that sets industry standards can affect company products through the issuance of recommended compliance standards for product development or other marketing activities. Communicating with this group is important to ensure the marketer’s views of any changes in standards are known.

Objectives of Marketing Promotions

The most obvious objective marketers have for promotional activities is to convince customers to make a decision that benefits the marketer (of course the marketer believes the decision will also benefit the customer). For most for-profit marketers, this means getting customers to buy an organization’s product and, in most cases, to remain a loyal long-term customer. For other marketers, such as not-for-profits, it means getting customers to increase donations, utilize more services, change attitudes, or change behavior (e.g., how to eat healthier campaigns).

However, marketers must understand that getting customers to commit to a decision, such as a purchase decision, is only achievable when a customer is ready to make the decision. As we saw in the tutorials covering Consumer Buying Behavior and Business Buying Behavior, customers often move through several stages before a purchase decision is made. Additionally, before turning into a repeat customer, purchasers analyze their initial purchase to see whether they received a good value, and then often repeat the purchase process again before deciding to make the same choice.

The type of customer the marketer is attempting to attract and which stage of the purchase process a customer is in will affect the objectives of a particular marketing communication effort. And since a marketer often has multiple simultaneous promotional campaigns, the objective of each could be different.

Types of Promotion Objectives

The possible objectives for marketing promotions may include the following:

1. Build Awareness

New products and new organizations are often unknown to a market, which means initial promotional efforts must focus on establishing an identity. In this situation, the marketer must focus promotion to: 1) ensure the message reaches customers, and 2) tell the market who they are and what they have to offer.

2. Create Interest

Moving a customer from awareness of a product to making a purchase can present a significant challenge. As we saw with our discussions of buying decisions made by consumers and businesses, customers must first recognize they have a need before they actively start to consider a purchase. The focus on creating messages that convince customers that a need exists has been the hallmark of marketing for a long time with promotional appeals targeted at basic human characteristics such as emotions, fears, sex, and humor.

3. Provide Information

Some promotion is designed to assist customers in the search stage of the purchasing process. In some cases, such as when a product is so novel it creates a new category of product and has few competitors, the information is simply intended to explain what the product is and may not mention any competitors. In other situations, where the product competes in an existing market, informational promotion may be used to help with a product positioning strategy. As we discuss in the Targeting Markets Tutorial, marketers may use promotional means, including direct comparisons with competitor’s products, in an effort to get customers to mentally distinguish the marketer’s product from those of competitors.

4. Stimulate Demand

The right promotion can drive customers to make a purchase. In the case of products that a customer has not previously purchased or has not purchased in a long time, the promotional efforts may be directed at getting the customer to try the product. This is often seen with mobile apps, where software companies offer free limited versions of their products. For products with an established customer-base, promotion can encourage customers to increase their purchasing by providing a reason to purchase products sooner or purchase in greater quantities than they normally do. For example, a pre-holiday newspaper advertisement may remind customers to stock up for the holiday by purchasing more than they typically purchase during non-holiday periods.

5. Reinforce the Brand

Once a purchase is made, a marketer can use promotion to help build a strong relationship that can lead to the purchaser becoming a loyal customer. For instance, many retail stores now ask for a customer’s email address so that follow-up emails containing additional product information or even an incentive to purchase other products from the retailer can be sent in order to strengthen the customer-marketer relationship.

The Communication Process

Before we venture into an in-depth analysis of promotion, it is necessary to lay additional groundwork by examining how communication process works. By understanding the basic concepts of communication, the marketer will have a better idea of what actions should be pursued or avoided in order to get its message out to its customers.

The act of communicating has been evaluated extensively for many, many years. One of the classic analyses of communication took place in the 1940s and 1950s when researchers, including Claude Shannon, Warren Weaver, Wilbur Schramm and others, offered models describing how communication takes place. In general, communication is how people exchange meaningful information. Models that reflect how communication occurs often include the elements shown below:

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The key elements of the communication process include:

Communication Participants

For communication to occur there must be at least two participants:

Message Source – The source of communication is the party intending to convey information to another party. In marketing, the message source can be an individual (e.g., salesperson) or an organization (e.g., through advertising). In order to convey a message, the source must engage in message encoding, which involves mental and physical processes necessary to construct a message in order to reach a desired goal (i.e., convey meaningful information). This undertaking consists of using sensory stimuli, such as imagery (e.g., written words, symbols, images), sounds (e.g., spoken word), and scents (e.g., fragrance) to convey a message.

Message Receiver – The receiver of communication is the intended target of a message source’s efforts. For a message to be understood, the receiver must decode the message by undertaking mental and physical processes necessary to give meaning to the message. Clearly, a message can only be decoded if the receiver is actually exposed to the message.

Communication Delivery

Communication takes place in the form of a message that is exchanged between a source and receiver. A message can be shaped using one or a combination of sensory stimuli that work together to convey meaning that meets the objectives of the sender. The sender uses a transmission medium to send the message. In marketing, the medium may include: the use of information outlets where promotion is only part of the content provided, such as television, websites, mobile apps, radio, print; promotion-only outlets that only display promotional messages, such as direct mail and billboards; and person-to-person contact outlets where a person presents promotional information directly to another person, such as in-person contact (e.g., salespeople), email and social media.

Additionally, communication can be improved if there is a two-way flow of information in the form of a feedback channel. This occurs if the message receiver is able to respond, often quickly, to the message source. In this way, the original message receiver now becomes the message source and the communication process begins again.

Obstacles to Effective Communication

While a message source may be able to deliver a message through a transmission medium, there are many potential obstacles to the message successfully reaching the receiver the way the sender intends. The potential obstacles that may affect good communication include:

Poor Encoding

This occurs when the message source fails to create the right sensory stimuli to meet the objectives of the message. For instance, in person-to-person communication, verbally phrasing words poorly so the intended communication is not what is actually meant, is the result of poor encoding. Poor encoding is also seen in advertisements that are difficult for the intended audience to understand, such as words or symbols that lack meaning or, worse, have totally different meaning within a certain cultural groups. This often occurs when marketers use the same advertising message across many different countries. Differences due to translation or cultural understanding can result in the message receiver having a different frame of reference for how to interpret words, symbols, sounds, etc. This may lead the message receiver to decode the meaning of the message in a different way than was intended by the message sender.

Poor Decoding

This refers to a message receiver’s error in processing the message so that the meaning given to the received message is not what the source intended. This differs from poor encoding when it is clear, through comparative analysis with other receivers, that a particular receiver perceived a message differently from others. Clearly, as we noted above, if the receiver’s frame of reference is different (e.g., meaning of words are different) then decoding problems can occur. More likely, when it comes to marketing promotions, decoding errors occur due to personal or psychological factors, such as not paying attention to a full television advertisement, driving too quickly past a billboard, or allowing one’s mind to wonder while talking to a salesperson.

Medium Failure

Sometimes communication channels break down and end up sending out weak or faltering signals. At other times the wrong medium is used to communicate the message. For instance, trying to educate doctors about a new treatment for heart disease using television commercials that quickly flash highly detailed information is not going to be as effective as presenting this information in a print ad, where doctors can take their time evaluating the information.

Communication Noise

Noise in communication occurs when an outside force, in some way, affects delivery of the message. The most obvious example is when loud sounds block the receiver’s ability to hear a message. Nearly any distraction to the sender or the receiver can lead to communication noise. For instance, many customers are overwhelmed (i.e., distracted) by the large number of marketing promotions they encounter each day. Such promotional clutter (i.e., noise) makes it difficult for marketers to get their message through to desired customers.

Keys to Effective Communication

For marketers, understanding how the communication process works can improve the delivery of their message. From the information discussed in the previous section, marketers should focus on the following to improve communication with their targeted audience:

Carefully Encode

Marketers should make sure the message they send is crafted in a way that will be interpreted by message receivers as intended. This means having a good understanding of how their audience interprets words, symbols, sounds, and other stimuli used by marketers.

Allow Feedback

Encouraging the message receiver to provide feedback can greatly improve communication and help determine if a marketer’s message was decoded and interpreted properly. Feedback can be improved by providing easy-to-use options for responding, such as phone numbers and email. Additionally, the creation and management of social media, online forums, and corporate blogs may also enhance feedback.

Reduce Noise

In many promotional situations, the marketer has little control over interference with their message. However, there are a few instances where the marketer can proactively lower the noise level. For instance, salespeople can be trained to reduce noise by employing techniques that limit customer distractions, such as scheduling meetings during non-busy times, or by inviting potential customers to an environment that offers fewer distractions, such as a conference facility. Additionally, advertising can be developed in ways that separate the marketer’s ad from others, such as designing magazine ads with a large proportion of whitespace.

Choose Right Audience

Targeting the right message receiver will go a long way to improving a marketer’s ability to promote their products. For example, messages are much more likely to be received and appropriately decoded when targeted to those who have an interest or are more involved in the content of the message.

Citation

Promotion Decisions Tutorial   (2022).   From Principles of Marketing Tutorials. KnowThis.com.   Retrieved   December 02, 2022  from   https://www.knowthis.com/marketing-tutorials/promotion-decisions/