PROMOTIONAL TOOLS AND ADVERTISING

Promotional strategy is designed to inform, persuade, or influence customers to purchase a good or a service, to push or pull products through the marketing channels. A push strategy is a promotional effort that persuades middlemen to sell a product aggressively. This strategy relies on personal selling to wholesalers and retailers, and influences them by providing promotional allowances for displays, special discounts, brochures, posters, and cooperative advertising, an arrangement whereby the manufacturer shares the cost of local advertising. This push strategy is especially important to compa­nies competing in markets, such as food stores where shelf-space is very restricted.

The pull strategy is a promotional effort designed to stimulate consumer demand for products and services through the use of advertising and sales promotion. The idea is to persuade the ultimate consumer to request a specific product from retailers so that the middlemen will be forced to carry it. This strategy is commonly used for health care products, books, and records.

Positioning is a promotional strategy that focuses on specific market segments. Market research identifies the market segments that will most likely purchase a product; that product is then differentiated from the competition and promoted with the appropriate market image. Product differentiation is accom­plished by distinguishing the characteristics of one product from another by such things as brand name, package, package design, capabilities, color, logo, taste, and price.

4 promotional tools

1) Advertising is "any paid form of non-personal presentation of ideas, goods, or services by an identified sponsor."

Two main types of advertising: product and institutional. Product advertising is designed to promote a product or product line. Product advertising can be primary or selective. The aim of primary advertising is to stimulate an increase in the sale in a class of goods without regard to brand. These ads are usually run by trade associations or unions. The aim of selective advertising, on the other hand, is to persuade consumers to purchase a specific product. This is the type of advertising you commonly find on newspapers and magazines, and on the radio and television.

Institutional advertising is designed to promote an image or goodwill message of a company, industry, organization, or government. Institutional (or prestige) advertising, is designed to build up their reputation rather than to sell particular products. Purpose is to promote a new store, to convey a message of goodwill, to attract business and tourism to different region

· Television

· Direct mail. Purpose is to obtain immediate orders or inquiries from customers.

· Outdoor advertising (poster panel and the painted bulletin)

2) Public relations (often abbreviated to PR) is concerned with maintaining, improving or protecting the image of a company or product.

3) Sales promotions such as free samples, coupons, price reductions, competitions, and so on, are temporary tactics designed to stimulate either earlier or stronger sales of a product.

4) Personal selling is the most expensive promotional tool, and is generally only used sparingly, e.g. as a complement to advertising. As well as prospecting for customers, spreading information about a company's products and services, selling these products and services, and assisting customers with possible technical problems, salespeople have another important function. Since they are often the only person from a company that customers see, they are an extremely important channel of information. Personal selling is often classified as either retail selling or business selling. Retail selling is that one-to-one selling which takes place in retail stores. In contrast to retail selling, business selling is one of the highest paid professions in America today. Business salespeople sell products to business and industry.

There are two main types of advertising agencies that offer their services for the companies. An advertising agency that offers a wide range of services is called a full-service agency. Often an agency will work with a client from the time of product conception through each stage in the product cycle.

Another type of agency is the boutique agency, which specializes in one service aspect of a campaign.

Although large companies could easily set up their own advertising departments, write their own advertisements, and buy media space themselves, they tend to use the services of large advertising agencies.

 

The client company generally gives the advertising agency an agreed budget and a statement of the objectives of the advertising campaign known as a brief; and an overall advertising strategy concerning the message to be communicated to the target customers.

How much to spend on advertising is always problematic. Some companies use the comparative-parity method - they simply match their competitors' spending, thereby avoiding advertising wars. Others set their ad budget at a certain percentage of current sales revenue. But both these methods disregard the fact that increased ad spending or counter-cyclical advertising can increase current sales. On the other hand, excessive advertising is counter-productive because after too many exposures people tend to stop noticing ads, or begin to find them irritating.