Promotion

The essentials

Promotion refers to the use of communication to inform and persuade potential buyers to buy a product. The tools used are called the promotion mix: advertising, personal selling, sales promotion and public relations.

Key points

• Advertising: a paid form of impersonal presentation and promotion of goods, services or ideas by an identified sponsor, through media such as newspapers, television, radio and the internet. Merits: mass reach, enhances customer satisfaction and confidence, expressiveness, and economy (low cost per person reached). Limitations: less forceful, lack of feedback, inflexibility and low effectiveness amid clutter.
• Personal selling: oral presentation in a conversation with one or more prospective customers for making sales. It is flexible, gives direct feedback and builds relationships, but it is costly per customer.
• Sales promotion: short-term incentives to encourage immediate purchase, such as rebates, discounts, refunds, product combinations (buy a shampoo, get a free comb), quantity gifts, instant draws, lucky draws, usable benefits, full finance at low or zero interest, sampling and contests.
• Public relations: managing communication to build a favourable image of the firm with the public, through press relations, product publicity, corporate communication and lobbying.
• Objections to advertising: it adds to the cost, undermines social values, confuses buyers, encourages the sale of inferior products, and some advertisements are in bad taste. Supporters reply that higher sales lower cost per unit, that it informs buyers about choices, and that it cannot sell a poor product for long.

Exam tips

• Advertising is paid and impersonal; personal selling is personal and two-way; publicity through news coverage is part of public relations.
• Sales promotion is short-term; advertising builds long-term demand.

Common mistakes

• Treating a free sample as advertising. It is a sales promotion technique.
• Thinking public relations means only advertising. It covers the overall image of the firm.