well in this short lecture we're going
to discuss the promotional mix and we've
discussed previously how the marketing
mix commonly referred to as the four p's
essentially works and it's we know that
it's a strategy of course in different
areas that companies and businesses need
to consider as a way of positioning
themselves to the extent that they want
to be positioned in the minds of
consumers and the promotional piece is
really one part of the four PS and so
specifically we're going to discuss how
the company utilizes its promotions as a
way of kind of bettering its overall
position in the market and so the
promotional mix we know consists of how
a company communicates with its audience
and with its consumers and so there's a
number of different things that
companies can leverage as a way of
presenting itself in a certain light of
course but also highlighting certain
features and certain benefits of the
different products and services that it
produces and so there are four elements
of the promotional mix and companies can
use these to varying degrees and as a
way of enhancing their overall at least
how they're perceived in the particular
market now remember with all marketing
aspects the ultimate goal is to try and
effect consumer purchase behavior so
ultimately we are trying to get people
to purchase our products and services or
more of them they generally some things
just take longer than others and so as
we're reviewing the promotional mix keep
that in mind
some of these elements may be more to
inform people or to create a need if you
will although some are more short-term
and are designed to affect purchase
behavior almost immediately from what
we'll see so let's highlight some of
these different components here and then
we'll discuss them one by one
now the first element of the promotional
mix and by and large the most common one
simply because we see it day in and day
out is advertising in advertising we
often have a lot of experience and
exposure to simply because it is so
visible you know there isn't generally a
moment during the day that we are not
being advertised to and
some way shape or form whether it's
product placement in television or
movies whether it's radio advertisements
whether it's advertisements on the
internet whether it's advertisements on
television you know they're generally
the only time that we are not being
advertised to is when we're sleeping
outside of that you see a large number
of advertisements geared towards trying
to get us to purchase certain things and
so first off how do we define
advertising there's a couple of
components advertising is paid and non
personal communication at which a
identified sponsor informs an audience
about a product and so paid non personal
at which an identified sponsor is
informing an audience about a product
and so you might wonder okay what are
these two elements that I have here I
wrote down paid and non personal and why
are those important well the first thing
is advertising it is delineated between
such things as publicity or public
relations because it is paid meaning
that a company is going to run an
advertising campaign and it will
essentially pay a another company to run
its particular advertisements or pay a
radio station to run a an audio kind of
advertisement if you will or pay a
particular company who owns a website to
show a banner ad or something similar
and so there is a paid element so this
this company sponsored of course but
it's also non personal and what is meant
by non personal is you don't have the
ability to interact with the ad and by
interact what I mean is in some
advertisements particularly we get to
some of the others is that you have the
ability to tailor the message to the
person individually with advertisements
they're generally created for a mass
audience for a large number of people
and so by advertising let's say on the
Superbowl maybe you're paying 2.7 or 3.1
million dollars for a 30-second spot
which is roughly what they go for
nowadays but if you divide that
ultimately by the reach or the number of
people that you are
vert izing - on a per person basis it's
very very small it's actually pretty
cost-effective but you have to be a
larger corporation to have that type of
budget for your marketing department now
it isn't tailored though to everyone
that's watching because depending upon
how someone interacts with the
advertisement I can't necessarily change
the message to meet the needs of that
person and so advertising generally is
meant to inform people about certain
products or services to make it so that
people recognize my brand because they
see it more often and generally you see
the companies that run advertisements
particularly during the Superbowl are
usually well-known companies that are
simply trying to make sure that their
brand's stay relevant and then they stay
up in front and they have a good brand
image if you will so obviously a lot of
companies would not necessarily
advertise during the Superbowl simply
because of the initial cost even though
on a per person basis it might actually
be lower in cost than some of the other
forms of promotion that I'm actually
going to go over here now there are a
number of different choices of media of
course and they all have different costs
so I went over obviously the aspect of
television advertising and how that can
employ a cost but you can go through a
number of different other advertisements
whether they're print like magazines or
newspapers whether it's online
advertising there's a number of
different opportunities that you have to
actually go ahead and advertise this way
now the next form of promotion is what
we call personal selling and personal
selling although it's a former promotion
operates in a very different way than
advertising and personal selling
involves a salesperson specifically that
will actually go ahead and communicate
one-on-one with potential customers so
you have one-on-one communication and
this is both positive and negative if we
talk about effectiveness of this
particular method you can argue that
this is probably one of the more
effective ways of promoting your
particular products and services it is
by far
the oldest as well as the most expensive
form of sales and the reason for that is
you're paying for cost on a one-on-one
basis and that has certain advantages
but it also has certain disadvantages so
let's look at the advantages first the
first of which is that you have the
ability to tailor your message to the
person who's actually receiving it and
you can look at things like nonverbal
communication you can assess their needs
you can ask them questions based upon
what are their needs and then
essentially offer them different
products or services that fit those
particular needs and so by and large it
is probably the most effective form of
promotion but it is very expensive
because you're typically paying for the
time of one person and your reach is
very small you know what we do is when
we analyze promotional methods you
consider two variables you're looking at
reach but you're also looking at
effectiveness and ultimately the larger
your reach generally the less effective
your promotional method is because you
can't necessarily tailor it to a few
people
since you're reaching a large audience
whereas in personal selling your reach
is very small right you're reaching
maybe one to three maybe a handful of
people at the very most and then
ultimately though you can tailor your
message to those particular individuals
and so we can do what we call qualify
people and make sure that they fit the
characteristics or people that would
have a need for our product or service
and then ultimately develop my pitch so
to speak in line with ultimately their
characteristics and what their needs and
desires are so on a on a total basis if
you were to look at just the
expenditures maybe personal selling will
be less than advertising but if you go
on a per person basis then personal
selling generally is more expensive than
simply your your advertising and
different things of that nature all
right the next form of promotion is what
we call sales promotion and sales
promotion you're all probably very
familiar to you may not have heard the
terminology before but you've definitely
experienced what sales promotion is and
sales promotion involves what we call
short term promotional activities
and what these short-term promotional
activities are designed to do is their
design to the design to encourage an
immediate purchase and that's a very
very important part of this particular
method because we mentioned that there
are some advertising methods that are
more long-term that are meant really to
inform and may not affect if anything in
the immediate future but sales promotion
is designed to ultimately have an
immediate impact right now
and so some common things for
promotional or sales promotional methods
include things like coupons where you're
offering the buyer a certain discount if
you will for purchasing a particular
product you may do things called like
offer premiums which are offering free
or reduced price items that are meant to
accompany a particular purchase and so
it's very common for example the day
after Thanksgiving sales typically if
you purchase product XYZ you might get
something for free and usually that
could be something of value or something
different obviously but it's meant to
obviously encourage you to make a
immediate purchase now you know buy one
get one free buy two get one free those
are all sales promotional methods and
they're designed and very effective for
buyers that are in the stage of the
consumer decision making or buying
process where they're at a point where
they want to make a purchase and it can
be ultimately they could be thinking
about a number of different products
that meet that particular need and the
sales promotional method and that form
of promotion may serve to have them
purchase one product over another if
everything is fairly constant things are
very fairly similar then ultimately the
price or the discount or the premium
that I get along with that purchase
might be enough to determine from
purchasing a product from one company
and purchasing it with another now the
last form of promotion is what we call
publicity and public relations and I'm
going to abbreviate that simply as PR
for public relations
and this takes a form of a couple of
different things first off let's go into
what publicity is publicity is
information about a company a product or
an event that is simply transmitted by
the general mass media as a way of
attracting public attention and so
publicity specifically is not controlled
by the company and this could be either
good or bad right publicity we know is
free because it's produced and provided
by the the mass media and so the news
outlets in different places will run
different events highlighting certain
stories highlighting certain businesses
the unfortunate thing though although it
is free you can't necessarily control
publicity you don't have the ability to
affect or change what that news outlet
or what the media will essentially say
about you and that essentially could be
very very problematic you know we've
heard of the term that well no press is
essentially bad press and although if
you're trying to raise awareness about
yourself then that might be true but to
an extent you can certainly argue that
you don't want negative things being
said about you or your company because
ultimately that could hurt the
perception that people have of you you
know just take for example within the
last several years
Taco Bell had the the huge issue where
there was an allegation that the meat
that they used wasn't real beef and it
was some other form of you know kind of
a combination of different things if you
will and obviously that wasn't something
that was produced by the company because
they wouldn't say something that would
necessarily affect them negatively and
they had to respond to that of course
and that's what you'll find is publicity
although it can be positive it can be
negative as well and it's important that
a company responds to those allegations
quickly much as Taco Bell did they ran a
number of different advertisements
saying that those were incorrect
they ran different advertisements saying
that studies had been done that proved
its you know such-and-such percentage of
ground beef or whatever the case was I
don't remember the
the exact specifics now but they
responded to that because publicity that
is a negative that does not go noticed
or it's not responded to people
generally accept as true if no one says
anything to nullify that or to negate
that potential issue there and so that
presents not only opportunities but also
presents some significant threats as
well now with regards to public
relations public relations is influenced
by the company and so here we have the
ability to change ultimately what the
perception is about our particular
company and so we know that public
relations our company influenced and the
purpose is twofold the first purpose is
to build a goodwill with the public
and so we want the public to view us as
favorable of course we definitely want
them to perceive us as a socially
conscious and environmentally conscious
company that does good positive things
and isn't in it simply just for for a
monetary gain and so that's important
and so companies have public relations
departments that are in charge of
drafting press releases and sending
those to different outlets and are
designed to raise awareness about all of
the good things that companies do just
look at websites for a lot of companies
typically they have a public relations
section or an About section and it's
just designed to highlight all of the
positive contributions that companies
are making and so once again you were
building goodwill because we as
consumers generally want to purchase
products from businesses that we
somewhat line up with from an ethical
standpoint but we also see that they are
giving back to the community and
generally having a positive impact now
the second event that I referenced that
public relations is designed to do is
deal with unfavorable events and there
obviously comes a time when bad things
take place and public relations is
designed to deal with those may be
unforeseen and unfavorable events so for
example we know that in the last several
years
British Petroleum commonly referred to
as BP had the Deepwater Horizon disaster
where an explosion took place on the
Deepwater Horizon oil rig which is just
outside of the Gulf of course and then
it obviously subsequently caused that
Deepwater Horizon oil rig to sink
severing connection with the actual
pumps and causing a large significant
number of oil to be pumped into the Gulf
which caused just devastation in that
particular area you have people like
fishermen who obviously needed the Gulf
to to provide for their families and
things and they weren't in positions to
do so you had restaurants that were in
that area that obviously suffered
significantly and so BP obviously their
public relations department was in
charge of dealing with a very
unfavorable event and so they ran
different advertisements on television
which typically showcased employees that
were from that
particular area and we're talking about
how they were present and how they were
dealing with it and they were committed
to that particular area they were
highlighting all of the money they've
donated to compensate people that were
affected negatively by this particular
event so they went through a lot of
public relations in an attempt to try
and not only deal with the unfavorable
event but also build some goodwill so
that ultimately consumers viewed them as
someone who was you know they were
responsible for the event but that they
weren't necessarily just leaving it for
someone else to handle they were
proactive and they were going out there
and trying to make changes now this
promotional mix like I said encompasses
the four areas of advertising personal
selling sales promotion and public
I'm sorry publicity and public relations
pardon me and companies will use these
together in unison as a way of
highlighting certain things and
companies don't have to use all of them
per se you know you don't necessarily
need to use personal selling maybe that
isn't something that you want to
specialize in and it obviously
represents a very significant cost
because it is more expensive on a per
person basis but companies can utilize
each of these in varying degrees as a
way ultimately of promoting and
communicating information about their
products and services to consumers and
so typically we don't resort to simply
just one or the other now usually we use
a number of these obviously to enhance
our promotional effectiveness if you
will but these are some of the elements
that ultimately you'll see companies
keying on