Promotion

Promotion Definition

Promotion is the use of communication to influence consumers to buy goods or services. It can include all forms of communication, ranging from poster advertisements to digital ads on social media. More specifically, a promotion in business can refer to a specific deal being offered on a good or service to attract additional sales. These often refer to temporary sales or tying arrangements where a select good or service can be acquired for a lower-than-average price or bundled with a complementary good.

Promotion may take place in several different contexts, including jobs, businesses, and marketing. Product promotions are a common marketing tactic used by large and small companies alike in the effort to attract new clients. The primary objective of product marketing is to bring attention to a new brand or specific item.

On the other hand, promotion in Internet service, cable television, cell phone service, or streaming television packages may include bundling additional services with a basic package for no additional charge.

Promotion Strategy

Promotion strategies can differ based on the type of customer a business wants to attract.

Some strategies are focused on attracting new customers, which can be done through introductory offers and promotional events. New customers are introduced to the product or company and are offered lower-than-usual prices. Introductory offers and promotional events are usually only available for a limited time to attract customers quickly.

Other strategies are focused on rewarding existing customers, frequently by offering unique products, services, and subscription packages only to those who have already registered with or purchased from the company. Companies with routine high-volume sales may use this strategy more frequently, such as gas stations and grocery stores.

These companies may offer reward plans that offer discounts to customers who purchase specific product volumes, especially over long periods. If a substantial percentage of a firm’s sales comes from repeat customers, this promotion strategy is a good idea to maintain.

Some strategies are generic and focus on all potential customers but will likely be conducted differently to appeal to different groups.

Targeted advertisements may be used for each group, highlighting various pieces of information.

Promotion Methods

There are many methods of creating, running, and advertising promotions. Some promotions can be advertised widely on all media platforms, from print to radio to the Internet. These appeal to a wide array of potential customers but are expensive.

Existing customers can be informed about promotions through information they have already provided the company.

This allows the company to also advertise to these previous customers directly. They can even tailor direct advertisements to the product the customer registered!

Conversely, companies that have purchased data about the customers of competing products may offer promotions that give discounts or additional goods and services to those who switch company loyalty.

Some advertised promotions may offer to match deals made by any rival company, potentially attracting customers who want to buy from a brand that provides aggressive promotions.

Promotion Types

There are many individual Promotion Types.

Promotions geared toward attracting new customers include:

• General advertising.

• Mass email marketing.

• Advertising positive customer reviews.

• Producing more "organic" advertising content through blog posts and social media posts.

These promotions must usually be simple, as potential customers may quickly tune out if an advertisement appears complex and difficult to get.

Promotions aimed at maintaining brand loyalty include:

• Direct email advertising.

• Deals on upgrades for existing purchases.

• Deals on trade-ins of existing purchases.

• Exclusive previews of new products.

• Contests and giveaways for existing customers.

Because they are targeting existing customers, many of whom are likely already registered with the company, the company can use more complex promotions.

These types of promotions will likely offer greater deals than generic promotions to all customers or introductory offers for new customers. Customers who have displayed brand loyalty over long periods may receive generous promotions to build inter-generational brand loyalty.

Recipients of such brand loyalty promotions are also likely to advertise the product or service's benefits to others, serving as organic marketing.

Role of Promotion in Marketing

Promotions are an excellent tool in marketing because they increase consumer demand.

One determinant of demand is the expectation of future prices. In other words, demand for a good or service rises today if it is believed that the cost of the good or service will increase in the future. Sales are only successful, therefore, if consumers believe that they are for a limited time only. By making promotions seem limited, companies can boost demand.

Another determinant of demand is the price of available substitutes and complements. Promotions can make the prices of substitutes seem higher in comparison, thus increasing demand for the promoted goods.

Promotions that include preferential access to, or lower prices for, complementary goods also increase demand directly for the promoted good. Using tying arrangements and bundling can increase consumer demand for the advertised product by providing complementary goods simultaneously. This can benefit the company if they have a surplus of complementary products and are trying to reduce the excess.