The 4 Types of Promotion

The Four Types of Promotion

Promotion is any kind of communication that a business/organization uses to inform people about its products and improve overall public image.  This is the core of any marketing strategy to increase awareness and, eventually, sales for your product or service.  Isn’t that why you market in the first place?  To get people to want to use your product?

While a general term, promotion can be broken into subsets and expanded upon.  For instance, there is product promotion.  Product promotion tends to cover five unique areas: introduces new products, explains features and benefits of a product, explains where the product can be bought, informs when the product is on sale and answers consumer questions.

There is also institutional promotion which does not directly sell a product but is used to increase brand awareness and image.  Eventually, that company could promote and sell products or services because the people will have an overall positive view of them.  Favorable brand imaging makes it even easier to promote products and/or services.

Essentially, everything in marketing that you hope to achieve is, or becomes, a form of product promotion.

Advertising

This is the most well-known of the promotion types.  Advertising is any paid form of promotion for ideas, goods and/or services by an identified sponsor.  You see this form consistently on commercials, radio ads, billboards, print ads, online ads and commercials, etc.  It is the form of promotion that you encounter the most in your daily life.

The features of advertising are that the time and/or space it uses is paid for, there is a set format to carry the message instead of one-on-one/personal selling and it identifies the sponsor of the message.  The easiest example would be a television commercial.  It has a standard format that is seen by everyone and not personalized to just you and the company that paid for it is clearly identified.

Whether through typical means such as TV or radio or through Facebook and Instagram ads, advertising is considered the most highly effective form of promotion.

Publicity

The best example of this is a press release.  When you place anything newsworthy about a company, product or person in the media, it is publicity.  You mainly use this type of promotion to build an image for a company or person.  Yes, there are such things as good publicity and bad publicity if you are selling products and/or services.

Your company would benefit from a newspaper article about it’s contribution to charity rather than an article about how your company enslaves a third world country to build its product.  The better your company image to the public, the easier it is to introduce new products and/or services and to increase sales.

Personal Selling

The most flexible and intimate of the promotion types, personal selling is face-to-face selling.  This is best exemplified by a door-to-door salesman.  The salesman must use their fine-tuned social skills and selling techniques to persuade a person to purchase the product and/or service.  This type of promotion can also be used to spread awareness about something without sales of any kind, such as a political candidate or a social movement.

Personal selling can be direct to the consumer as in the door-to-door salesman who visits potential customers or in the retail channel, which is in-store.  The sales associates behind the counters of the products you are inquiring about are examples of retail personal selling.  It is their job to understand a customer’s need and present favorable options for them.

Sales Promotion

Sales promotion is all other marketing activities outside personal selling, publicity and advertising.  While advertising and publicity tend to be longer in length, sales promotion uses a shorter time frame or shorter term activities.  It is essentially the promotion of a discount or sale for the product and/or service.   This promotion can be effectively used in all distribution channels: wholesalers, manufacturers, retailers and consumers.

Based on the distribution channels, sales promotions are either Trade oriented or Consumer oriented.

Consumer Sales Promotions:

• Product Samples – A free trial size of the product that is distributed door-to-door, in the mail, in a retail store or at a trade show.
• Incentives – These are called premiums and they are designed to attract new customers and build product loyalty.  The four types of premiums are coupons, factory packs (the stuff in cereal boxes), traffic builders (pens, magnets, calendars) and coupon plans (soup labels, proof of purchase).  Coupon plans are usually those programs where you send in a certain amount of bar codes, soup labels, etc. and can get a discounted item or a free item.
• Tie-Ins – This is where different businesses use their resources to help each other gain attention, build sales, create awareness and penetrate new markets.  It can be as simple as a highly branded and visible brand putting a coupon for the lesser known company on their product.  You can reach an already established target audience for your product that fits in that same target topic.
• Visual Displays – This pertains to the in-store displays in which the product is presented to the consumer.  It could be window, floor or counter displays.  It takes a coordinated effort to get all of the physical elements in place so that the business is projecting the right image to customers.  You see these constantly in department stores and grocery stores.
• Licensing – Where organizations, sports teams, movie companies, manufacturers and celebrities allow a business to use their image, logos or people to promote that businesses products for a fee.   A very well-known example is when a food restaurant offers toys or special graphic packaging to promote a new movie coming out.  McDonald’s and Taco Bell are big players in this tactic.

Trade Promotions:

• Sales Incentives – This is where awards, or prizes, are given to employees to attract and retain customers.  They are given to meet or exceed sales expectations for a particular product line.  Usually you see this in the form or money or trips.  For instance, an incentive might be that commissions are doubled for every 10th unit that is sold.  Business management uses this often to motivate higher performance from their sales teams.
• Buying Allowance – A discount given to wholesalers or retailers to motivate them to buy a product or more of a product.  This could be a cash discount overall or a a certain amount of the product for free if they purchase a set amount.

Many times you will see a healthy mix of these different types of promotion in one marketing plan.  Weaving quite a few of these together is the most efficient way to maximize your product’s sales and exposure to a wider audience.  While we see many examples of these promotion types in our daily life, we may take them for granted.  Knowing what they are and how they connect and play off of one another is crucial for building a solid foundation for your long term marketing strategy.  A successful company knows that mastering the basics is the key to absolute growth.

Whether you do it in-house or hire a digital advertising agency to build your ultimate strategy and bring it to life, never underestimate the classics.

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