Promotion and Distribution

1.  PROMOTION
Promotion is the function of informing, persuading, and influencing purchase decisions. 

• Informing:  Educating the target market about the product: primarily the features and benefits, but also price and place (where to find it for sale). “Tooth whiteners are available in your local drug store that are safe, easy to use, and very affordable.”
• Persuading:  This is the effort to get someone to try the product. “You’ll get more dates with whiter teeth – try our new tooth whitening product”.
• Influencing:  You already buy the product; why is ours better? “Our brand of whitener works faster, better, is cheaper, and makes you look sexier.”

The tools utilized to achieve these goals are referred to as the Promotional Mix.  These include personal selling and non-personal selling, which is comprised of advertising, sales promotion, and public relations.

Personal Selling
Personal selling is the most direct method of informing, persuading, and influencing customers.  It can also be very expensive, as unlike advertising, which once created may passively sell to many people over the life of the ad, personal selling requires a one-on-one interaction between a salesperson and a potential buyer.  Some companies estimate that it may cost up to $200 simply to present your sales message to one person.  Because of this, many companies utilize pre-screening techniques to “qualify” potential buyers.  A post card or a magazine ad asking the reader to “call for more information” is a tool with which possible customers pre-qualify themselves as interested enough to warrant a personal sales call.  Telemarketing calls are also used to screen possible customers, as telemarketing is less expensive than a cold call (a cold call is when you have no appointment, just drop in hoping to find a decision-maker to talk to).

The biggest advantage to personal selling is that it is not passive, but can be tailored directly to the user even in the middle of the sales presentation.  So though the costs of personal selling are higher than non-personal selling, the results can be more immediate and in larger quantities.

Advertising

Some scholars suggest that advertising has an interesting dual personality.  Is advertising informing us of something we already want, or is it persuading us to want something we didn’t think we needed?  Do we really need deodorant or mouthwash or germ-killing floor cleaners, etc.?  Advertising has convinced us that we need these items, and sales of these products totals in the millions of dollars.

To be fair, however, advertising also helps keep us informed and educated about what is available in the marketplace.  It’s up to us, as individual consumers, to decide whether the product has value for us personally.

Advertising consists of several main categories. 
 

1)    Print media – primarily newspapers, magazines, and billboards (known as “outdoor” advertising). 

2)    Electronic media – television, radio, internet (although there is gray area – we call some internet ads “billboard” or “banner” ads).

3)     Direct Mail – flyers, mailers, coupons, etc., that come in the mail.

With advertising, the “informing, persuading, influencing” tasks are often developed into strategies focused on the target market.  Some advertising is meant to “gain” new customers from the target market base, and then subsequent ads are directed at “retaining”, or reminding customers about the product. 

Much of the advertising for large companies is handled by specialized agencies, and fees to these ad agencies may be a major marketing expense.  Advertising Agencies may be very specialized, and some large companies retain different agencies for each main category of advertising.

Sales Promotion
We see sales promotions every time we go into a store – point-of-purchase displays are near cash registers, and while we stand in line we are informed, persuaded, and influenced about a new movie that has just come out, vacations to exotic places, a new cleanser, etc.  Coupons and specialty items (logoed merchandise) are also effective sales promotion vehicles, as they are relatively inexpensive, yet keep the product name in front of the customer.

Many major advertising campaigns have a sales promotion component.  While the advertisements are running on TV and in magazines, store displays and point-of-purchase materials echo the advertising message, increasing its impact.  Sales promotions may continue after the expensive TV campaigns are over, but they extend the life of those campaigns by reminding customers of the earlier TV ads message.

Push, or Pull?

A “pull” marketing strategy attempts to persuade the customer to go to the store and ask for the product.  Stores and distributors will quickly see the high demand and order the product from the manufacturer.

“Push” marketing strategies utilize advertising in trade magazines and industry journals, along with a strong distribution push to distributors and stores (distribution discussed more below), to persuade stores to carry and promote a product – “pushing” it towards customers.  Point-of-purchase displays and other sales promotions are often given to distributors and retailers as part of this strategy.

Public Relations
Good public relations work can result in publicity, which are free published stories or articles about the company.  Studies have shown that this form of information about the company and its products can have a greater impact with customers than advertising because it appears to be unbiased.  This has some truth to it, but it is also true that companies spend a great deal of money on specialty Public Relations or Publicity agencies whose expertise is getting positive information about the company published. These agencies send a constant stream of “Press Releases” to media about positive developments in the company, with the aim of having a reporter write an article or prepare a TV spot. 

In small companies, public relations can be more grass roots – a letter to a local paper about the company and its products may result in an article in the business section of the paper.  This is free advertising, except for the time it took to write and mail the letter.  Many “guerilla marketing” books suggest just this type of simple action, as publicity is the most cost effective form of advertising.

2.  DISTRIBUTION
The ways a product moves from the manufacturer to the final customer are referred to as “channels” because they are like rivers that flow from the source to the sea.  This analogy works well, as the fastest and most efficient way for the river to reach the sea is the most direct – a straight line with no dams. 

Sometimes, however, it can be necessary for the river to build up volume behind a dam before moving on until ultimately reaching the end.  There is a cost, however, with each stop along the way as the dam takes away some of the force of the down flowing water.

The following links explore distribution in depth.
http://en.wikipedia.org/wiki/Distribution_(business)
http://www.consumerpsychologist.com/distribution.htm

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