4.01 – Promotion
A. Understand promotion.
1. Promotion: Any form of communication a business uses to inform, remind, or
persuade customers to purchase products and improve its public image.
2. For example, Harris Teeter places circular advertisements in the newspaper to
inform customers of its weekly specials.
B. Summarize institutional and product promotion.
1. Institutional promotion: Used in an effort to create a positive image, build
goodwill, and increase customer loyalty for the business. For example, a local
hardware store sponsors a neighborhood little league team.
2. Product promotion: Used to increase sales of a business and its products.
Product promotion is heavily used for new products. For example, Coca-Cola
runs a series of television commercials to promote its newest cola beverage.
C. Summarize elements of the promotional mix.
1. Personal selling: Planned, personalized communication designed to satisfy a
customer’s needs and wants. For example, a car salesperson listens to a
customer’s requirements and then suggests a vehicle with the features and
benefits to satisfy his/her wants and needs.
2. Advertising: Any non-personal form of communication designed to inform,
persuade, or remind customers about a good or service. Advertisements are
paid for by an identified sponsor. For example, TV, radio, and magazine ads.
3. Sales promotions: Communications or activities used to stimulate sales, create
awareness of a new product, or to create goodwill for the business. For
example, a Chinese restaurant offers free samples in the mall food court hoping
customers will like the sample and purchase a full meal.
4. Public relations: Activities used to build and maintain a positive image about a
company and its products. For example, Panera Bread Company donates its
leftover bread to homeless shelters and charities in need.
D. Summarize advertising.
1. Advertising: Any non-personal paid form of communication designed to inform,
persuade, or remind customers about a good or service.
2. Media: The agencies or means used by a company to convey an advertising
message.
3. Cooperative advertising: Occurs when a manufacturer helps a retailer pay for
advertising costs. For example, Kellogg gives Kroger money to help them
advertise Kellogg cereals in their promotional materials.
E. Compare advertising media.
1. Print media:
a Newspapers
i.
Advantages
(a) Low cost
(b) Distribution level of the newspaper is known
ii. Disadvantages
(a) Limited distribution
(b) Limited life span
(c) Black and white print is less visually appealing
b Magazines
i. Advantages
(a) Color printing is visually appealing
(b) Ability to target the desired audience
(c) Higher quality medium than newspapers
ii. Disadvantages
(a) Higher cost to create and produce
(b) More lead time required than for newspaper advertising
c Direct mail includes catalogs, letters, and coupons
i. Advantages
(a) Can be highly selective and flexible with format and timing
(b) Inexpensive to create and produce
ii. Disadvantages
(a) Low response rates
(b) Expensive to distribute
(c) Often viewed as “junk mail”
d Outdoor advertising includes signs and billboards
i. Advantages
(a) relatively inexpensive
(b) 24/7 visibility
ii. Disadvantages
(a) Limited viewing time
(b) Increased government regulations
e Directory advertising is most commonly seen in the form of telephone books.
i. Advantages
(a) Allows targeting based on geographics
(b) Targets all demographics
ii. Disadvantages
(a) Printed infrequently, making changing the ad difficult
(b) Limited space and quality of advertisements
f Transit advertisements are located on moving vehicles, including buses,
trains, and transportation terminals.
i. Advantages
(a) Wide, captive audience
(b) Economical
ii. Disadvantages
(a) Subject to defacement
(b) Inability to target a specific audience
2. Broadcast media includes television and radio advertising. Broadcast media is
popular because it reaches a large audience.
a Television advertisements combine color, action, and sound, which can make
it very effective. Generally ads are 30, 45, or 60 seconds in length.
i. Advantages
(a) Ability to demonstrate product features and benefits
(b) Advertisers can choose target audience based on time and station
programming
ii. Disadvantages
(a) High production and airtime costs
(b) Short life span
(c) New technology enables viewers to skip commercials
b Radio advertisements reach a large audience and are generally 10, 20, 30, or
60 seconds in length.
i. Advantages
(a) Cost effective
(b) Can be created and changed quickly
(c) Ability to reach a target audience through various station formats
ii. Disadvantages
(a) Appeals only to sense of sound
(b) Short life span
(c) Channel surfing
3. Online media includes the use of email and the World Wide Web to promote
products. The use of online media is a growing concept.
a Electronic direct mail is an advertising message sent to potential customers
via e-mail.
i. Advantages
(a) Ability to target an audience
(b) Inexpensive
(c) Personalized messages
ii. Disadvantages
(a) May be viewed as a nuisance
(b) Spam filters can reduce unauthorized messages
b Online ads include banners, pop-ups, and buttons.
i. Advantages
(a) Inexpensive
(b) Can be interactive
ii. Disadvantages
(a) Viewed as a nuisance
(b) Often a low response rate
4. Specialty media, also called giveaways, are inexpensive, useful items with a
company’s name or logo. For example, Papa John’s Pizza will give customers a
magnet with their logo and phone number.
a Advantages
i. Company’s name is always visible
ii. Customers enjoy freebies
b Disadvantages
i. Limited distribution
ii. Some recipients will never become customers (wasted distribution)
F. Explain the roles of advertising agencies and cooperative advertising.
1. Advertising agencies design ads and ad campaigns for clients for a fee.
2. Cooperative advertising occurs when a manufacturer helps the retailer pay for
the cost of advertising locally. For example, Kellogg helps Food Lion pay for
advertising that features Kellogg products.