Here is a detailed overview of the promotion segment within the marketing mix. The perspective from a customer-centric point of view is in parenthesis:
Promotion (Communication). This is the essence of marketing. You first need to establish a brand such as Ford or Coke, then product name such as Mustang or Diet, along with a logo. Any type of identifier that can separate your product from the rest is also beneficial, such as the unique shape of an Orangina bottle. You also need to know whom you are targeting, which is known as demographics as previously discussed.
Once you have your brand and demographics in order, you need to choose the way you want to present the product. You should determine facts like whether it should be demonstrated, dramatized, explained, or displayed. Ways to help make sure you have fully developed the content of the message, also known as the “ad copy,” are through various guidelines like AIDA and USP.
AIDA is an acronym for:
USP is an acronym for Unique Selling Proposition. The message focuses on the products uniqueness, which is the motivational reason for people to buy it. This is usually communicated through a memorable tag line that says it all about the product. An example would be, “Milk, it does a body good.” Whether this is actually true or not, the message makes you think one important and easy to remember thing about milk, if you drink it you‘ll be healthy.
The promotional mix is made up of four main tools, Advertising, Personal selling, Sales promotion, and Publicity.
Once the content of the message has been established, it’s time to consider which media you will use to get your message out and create an awareness of your product. This lets people know your product exists, and helps when making a choice on which product to buy based on seeing or recalling your ad.
Advertising methods most commonly used are through magazines, newspapers, TV, radio, direct mail, trade shows, yellow pages, e-mail blast, billboards, posters, and over the Internet. It is also a great idea to list testimonials, customer statements, and case studies about the value of the product on your company’s web site.
Advertising through media buys can be costly and needs to be carefully budgeted. One way to set up a budget is to estimate the expected sales. For example, if the expected sales are $100,000, you can budget a figure like 5% towards the ad campaign, or $5,000. You can also use the industry average towards advertising costs.
Here is an example of a common way for a retailer or service based company to budget for advertising:
Projected gross sales, times 12% (common percentage), minus the cost of occupancy (rent), equals the advertising budget. For example, it the gross sales is projected to be $100,000, and the cost of occupancy is $5,000, then the advertising budget should not go over $7000.
100,000 * .12 - 5,000 = 7,000
A couple of ways to measure the amount of people who might view your advertisement is through Reach, Frequency & Impact. Reach calculates the number of people who were potentially exposed to the ad, Frequency measures the number of times people see or hear the advertisement, and Impact determines whether the ad is remembered and communicated as intended, which is usually seen in a higher increase in sales.
Sales promotions to businesses and industries such as offering quantity discounts, free merchandise or buy-back allowances, are effective and build trusting and workable relationships.