Promotion is communication to the potential consumer and refers to the non price selling activities of the firm. Three important types are advertising, personal selling and sales promotion. Advertising is any paid form of non-personal presentation of merchandise to a group by an identified sponsor. Personal selling is the process of assisting and persuading a prospect to buy a commodity in a face-to-face situation. Sales promotion includes such devices as trading stamps, dealer aids, incentive travel, premiums, contests, and so on. In practice, sales promotion activities are used primarily to supplement advertising or personal selling. The general goal of the promotion element in the marketing mix is to increase sales, but the strategic objective is to enhance the effectiveness of the other marketing mix components.
Advertising and personal selling are different means to the same end â€“ increasing sale. Usually they are employed together. Advertising appeals to the mass mind, whereas personal salesmanship is directed to the individual. Advertising assists salespeople and makes their efforts more productive by giving preliminary information about the product to prospects or developing good will toward the sponsor.
The successful marketing manager is always aware of the fact that the promotional activities are a cost to the firm. Therefore, selling expenditures have to be justified in terms of increased sales and profits. Using incremental reasoning, the added expense of any promotional outlays should equal or exceed the additional profits generated. This is not always possible because some types of promotional outlays are common to more one product while others are intended to be long-term as in the case of institutional advertising or trade shows. For example, paying athletes large amount of money to use your products is necessary because competitors do it, but the sales benefits are taken on faith.
The advertising manager is usually in charge of a firmâ€™s advertising program, and has the responsibility to plan the entire advertising program, to draw up a budget and to justify the request for funds with expert help from an advertising agency. The advertising agency is a service institution composed of specialists that assist clients in planning, preparing, and placing advertising. Agencies are paid by various media. Some firms have their own internal advertising department.
The promotional manager has two key responsibilities: (1) to develop a promotional mix for each product, and (2) to formulate the promotion budget. The mix depends on many factors, such as funds available, nature of the product, stage of productâ€™s life cycle, market structure, channel of distribution, and location and size of the markets. Budgeting must start with the objectives or goals to be achieved. Some of the approaches used are: (1) spend all you can afford; (2) spend a fixed percent of past or expected sales; (3) imitate competition; (4) spend so much units of product. Logically, the objective task approach is the most sensible; this means the advertiser starts out by establishing a hierarchical list of goals or objectives to be met during the budget period.
Personal selling is usually the responsibility of the sales manager, who hires, fires, trains, and supervises the sales force. Most personal selling is directed to the middleman; some to the ultimate consumer. Some selling is creative in nature because it involves the process of arousing demand and persuading the buyer, whereas some is simply routine because the customer has already decided to buy. In general, the salesman helps the buyer solve his problems and is a good ambassador. For example, in marketing high tech products the salesman can be a valuable source of information about product innovations and technological research being done in the industry.
The sales manager must organize the sales force for maximum effectiveness. Bases for organization include: (1) the geographic area; (2) the type of product; (3) the kind of customer (consumer or industrial); (4) the channel of distribution (middlemen versus direct buyers); or (5) the nature of selling task (new business or servicing old accounts).