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Promotion Mix

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What is the Promotion Mix?

The Marketing Communications Mix or the Promotion Mix is a set of various marketing tools that a company or marketer utilizes to achieve its marketing and promotional objectives. An optimized promotion mix helps target the right audience efficiently and effectively. Marketers can decide upon the right mix of tools to be utilized based upon their marketing objectives and audience size. Prior to developing the promotion mix, the marketer needs to study his audience and accumulate the required data and set clear marketing objectives required for developing the promotion mix. Developing the promotion mix also requires setting a budget as well as selecting the channels that will help the company achieve its marketing objectives with the highest efficiency.

There are some questions that the marketers must address to develop an effective promotion mix.

  • Who is my target audience?
  • What is our budget and how much to allocate to each channel?
  • Which marketing channels and methods will be most effective at reaching my audience?
  • What is the objective of the promotions or what is the company specifically trying to achieve through it?

In Kotler’s words,

A company’s total marketing communications mix, or promotion mix, consists of the specific blend of advertising, personal selling, sales promotion, and public relations tools that the company uses to pursue its advertising and marketing objectives. 

Philip Kotler. Principles of Marketing.

The five main elements of a promotion mix

Advertising:

It is one of the most commonly used tools of promotion and worldwide companies in all industries use it to grow their customers’ interest in their products, to inform customers about new products or price changes and so on. Companies can use advertising to achieve various purposes including growing awareness.

According to Kotler, advertising is

Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

Every day we come across several ads, many of which catch and sustain our interest and several are easily forgotten. It depends on the kind of content, message and the media used by the advertiser to convey his message to the market. Leading companies like Coca Cola, Pepsi, Walmart, etc have large advertising budgets and spend billions on promotions of their products. With time the efficiency of market channels has grown supported by growth in technology. Now, advertisers can reach millions of customers through social media and by running a promotional campaign on any of these social media channels including Facebook, Twitter, Instagram, and Youtube. 

Personal selling: 

Personal selling involves the use of sales personnel to grow outreach and sales of products in the market by reaching out directly to the customers through the company’s salesforce. When the company’s salesforce personally reaches out to the audience to sell or promote a product or idea and to build stronger customer relationships it is called personal selling. 

According to Kotler, Personal Selling is

Personal presentation by the firm’s sales force to make sales and build customer relationships.

While digital technology and social media have changed the way brands market and promote their products and brand, a large number of companies still utilize personal selling to grow their customer base and promote new products. While on the one hand, it helps strengthen customer relationships, on the other it also helps grow the level of trust among customers. Face to face interaction with the target audience is still considered highly effective at growing relationships with customers and hacking into new target markets. Car dealerships and banks frequently utilize this method to inform customers and build relationships. However, apart from the banking and automobile industry, personal selling is considered an effective method of promotion in many more industries.

Sales Promotion:

Sales promotion mainly includes short term incentives offered by companies and marketers to drive higher sales by growing demand for specific products and services. This method is used by marketers and companies to build urgency and drive customers to the stores through time-sensitive offers and limited-time promotions. Brands frequently use such limited time promotions during the offseason or to clear the remaining unsold inventory. While several companies use such offers during the offseason or when demand is falling or if a new competitor has entered the market, many companies use it throughout the year or as a core element in their marketing strategy. 

According to Kotler, Sales promotion is 

Short-term incentives to encourage the purchase or sale of a product or service.

Discounts and year-end sales are frequently used by companies to grow sales. At the Walmart stores, you can have products at discounted prices all year round. However, fashion brands and food brands also offer discount sales on various occasions. While sometimes the objective is just to drive sales higher, at other times, the objective may be to limit the prospects for a new brand entering the market.

 Public Relations:

Public relations utilizes audience connections to generate favorable publicity and strengthen brand image. Companies build interesting stories and promote a favorable image before the public utilizing various media channels. In this way, they try to gain the support of all associated stakeholders including customers, government, the general public, investors and other stakeholders. Frequently, companies bring to light their CSR activities to gain publicity and to form a positive public opinion of themselves. Media publicity activities and events are also a part of the PR strategy.

According to Kotler, Public Relations is 

Building good relations with the company’s publics by obtaining favourable publicity, building up a good “corporate image,” and handling or heading off unfavourable rumours, stories, and events.

A company does not always gain favorable word of mouth. Sometimes unwanted rumors can also hurt a company’s image. In such a situation, a good PR strategy helps at heading off the crisis and regaining the lost reputation. Large Corporations like HP or P&G often partner with NGOs in CSR and to strengthen their reputation by investing in community welfare. What do they gain from such activities if not favorable publicity and positive word of mouth?

Direct marketing:

Direct marketing involves the use of direct communication channels to reach specific individuals to obtain a direct or immediate response. Companies use several such channels or tools like telephone, email, fax or other nonpersonal tools to reach targeted individuals directly and obtain a response. Email marketing and SMS marketing have been highly popular in this regard. E-commerce companies like Amazon and Flipkart use email and SMS to reach customers. Apart from informing them of new products or discounts, these companies also use email and SMS marketing to gain feedback from the customers directly. Banks also use email and SMS marketing extensively.

In the words of Kotler, Direct Marketing is

Direct communications with carefully targeted individual consumers to obtain an immediate response—the use of mail, telephone, fax, e-mail, and other non-personal tools to communicate directly with specific consumers or to solicit a direct response.

Benefits of promotion Mix:

An effective promotion mix offers several advantages apart from increased sales. It does not just help promote a product or brand and drive higher sales but also helps develop stronger relationships and grow brand awareness sharply. The benefits of promotion mix or marketing communications mix are several and the results can be great if the marketer places consistent focus on each and every aspect of the promotion mix.

Improved ROI on promotional campaigns:

A well designed and effective promotion mix helps grow the reach of a brand and its influence in the market. Marketers must focus on each aspect of their promotion mix to send a consistent message. This will grow the ROI on their promotional campaigns. Planning the promotion mix effectively and utilizing the right channels will bring improved results and higher ROI on the budget you have invested in your marketing campaign.

Improved communication and customer relationships:

A good promotion mix also helps engage your customers better through more effective communication. Customer relationships can grow better with the help of a balanced promotion mix. It is a highly profitable deal for any brand in the long term. Companies can utilize personal selling and direct marketing as well as Public relations to grow customer relationships and market a favorable image before their audience. A promotion mix allows you to utilize several channels to send a compelling and consistent message to a broader audience. You do not always need to utilize all the channels to create a great image. 

There are a large number of companies that do not have sizeable marketing budgets but they still have a strong market presence. It is because they use the right channels for the maximum impact and using the right mix of promotional elements helps them achieve their marketing objectives with higher effectiveness. Take Costco for example. It does not invest much in advertising but places a strong focus on customer relationships. A lot of relationship-building goes on inside the Costco warehouses where the focus is on customer experience and customer satisfaction and serving the customers in the most efficient manner. The same is true about Starbucks as well which does not spend much on advertising but uses social media and instore marketing for customer engagement and to build strong customer relationships.

Helps differentiate the brand from competitors and grow influence:

Your promotion mix helps you craft a unique identity for your brand and build a differentiated image that helps your stand out. It allows you to connect with your audience through the utilization of various channels and thus craft a very different and unique story for your audience. While on the one hand, it helps you grow brand recognition, on the other it helps you grow your company’s overall influence in the market.

Higher conversion and sales:

Utilizing the right channels for promotions, you can grow your sales and conversion ratio. Sometimes advertising is highly effective at driving sales and sometimes you can grab lost opportunities in real-time using email marketing. Email and SMS marketing have been found to grow the conversion ratio and drive higher sales in real-time. Social media promotions are also effective in this area.

Higher customer retention rate:

You can grow your customer retention rate by building strong customer relationships through various channels. Email marketing, as well as social media marketing, and PR help you engage customers, build trust and retain your existing customers for longer. They also help at creating brand recall. 

Example Promotion Mix of Coca Cola:

Advertising:

Coca Cola utilizes several advertising channels to reach its customers worldwide. Apart from promoting on social media, it also utilizes paid and unpaid promotions for running social media campaigns as well as paid online advertising to promote its brand and products. Other advertising channels include traditional channels like print media, television and outdoor advertising or retail store promotions. Traditionally, it has used advertising heavily to grow brand awareness, build brand recognition and drive sales. Spending on advertisements is particularly higher during off-seasons.

Personal selling:

Coca Cola does not utilize this element of the promotion mix much. It is because it has a large and diversified customer base and strong brand recognition as well. In such a case, personal selling does not prove highly effective at creating reach or growing demand. Personal selling is most effective when you have to reach a well defined and small customer segment. However, it does use celebrity sponsorships to grow demand.

Sales promotions:

Sales promotions and discounts are also a common part of Coca Cola’s promotions strategy and they are used most often during the offseason. It offers its customers discounts during the festive and holiday season as well as when the demand is low.

Public relations:

Public Relations (PR) is a common part of every big brand’s promotions strategy including Coca Cola. The company uses this channel to head off negative publicity as well as build a favorable image among the general public and other stakeholders. As a leading nonalcoholic beverage company, Coca Cola deals with a lot of negative publicity and rumors on a regular basis.

Direct Marketing:

This is also one of the less utilized promotional channels of Coca Cola. However, from time to time, the company utilizes email marketing to tell a story or grow customer engagement.