All objectives of promotion should always be linked to the overall corporate objectives of the business organization. It is because promotion is a part of the company’s marketing plan which reflects the firm’s mission statement and business objectives of the whole organization.
Promotion campaigns can be planned to achieve either one of the marketing objectives or several objectives at the same time.
Objectives of promotion can be focused on the short-term which is less than 12 months or on the long-term which is more than 5 years. For example, from boosting sales in the next quarter to rebranding the whole company. These objectives are then communicated with the target consumers.
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Reasons for promotion
The main reason for promotion is to increase sales of a business organization by attracting and retaining customers.
However, promotion of goods and services aims to achieve plenty of other more specific objectives. Let’s take a look at the most common reasons why businesses promote.
NEW PRODUCTS:
- Raising consumer awareness of newly launched products.
- Encouraging trial of a new product to increase purchases by existing consumers.
- Informing the target market about a new feature of a product or added benefit.
- Attracting new consumers to the brand and persuade them to buy the new product.
EXISTING PRODUCTS:
- Attracting customers’ attention by making them aware of the product and reminding them that the product is still available for purchase.
- Developing recognition of the firm’s product mix and attracting attention to the whole product portfolio.
- Reminding customers of existing products and their distinctive qualities to extend the life of the products.
- Reassuring the consumers that everything is fine after following a problem with the product or an accident involving the product.
- Correcting any misleading reports about the product or business to modify attitudes.
- Informing the market that the products has been updated or adapted in some way.
BRANDING:
- Creating and developing certain brand image when the brand is initially established.
- Reinforcing the brand image of the product, especially in consumer markets where all products from different suppliers happen to look the same and perform the similar function.
- Developing the public image of the whole business organization through corporate advertising.
- Building brand recognition and brand awareness to cement the major main selling points in the minds of current and potential customers.
COMPETITION:
- Explaining and showing that the product is better than competitors’ products.
- Demonstrating the superior specifications, features and qualities of a product compared with those of competitors.
SUPPLY CHAINS:
- Encouraging wholesalers to stock up the product.
- Encouraging retailers to stock the products and actively promote them to the final customers.
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3 main strategic objectives of promotion
There are three key strategic objectives of any promotional campaign mainly focused on increasing sales and maximizing profitability. They include informing customers about the product, persuading customers to buy the product and reminding customers about the firm’s product.
1. INFORM
It gives the target audience full information about the product.
Informative promotion aims to keep the current and potential markets informed about firm’s products – both existing products, updated products and new products. This kind of promotion will include detailed information about the product functions, facts and figures, pricing options and where the product is available for purchase. The aim of informative promotion is to give customers sufficient information to influence their buying decision.
For example, when Sony launched its Sony PlayStation 5 console it wishes to inform gamers about pre-ordering and buying the newest game console, availability of new games, more new features such as faster speed of loading games, system software, accessories, etc.
2. PERSUADE
It tries to persuade the target audience that they really need the product.
Persuasive promotion aims to encourage new customers to make a purchase by switch from rival products and current customers to buy more products more often. This kind of promotion will use product differentiation techniques and branding to enhance the product’s image to also generate impulse buying – subconsciously make the customers buy the product without them planning to do so. The aim of persuasive promotion is to entice customers to create brand loyalty.
For example, Sony wishes to persuade gamers to choose its Sony PlayStation 5 console instead of buying a competing game console from Microsoft such as Microsoft Xbox or Nintendo Switch from Nintendo.
3. REMIND
It is used to keep customer awareness and interest in the product.
Reminder promotion aims to retain the customer of products that are in the maturity stage of their product like cycle. This kind of promotion will maintain customer awareness of the existing products, so the business can maintain its sales revenue. The aim of reminder promotion is to retain the target audience to keep the top-selling products in the maturity stage, or saturation, for as long as possible.
For example, Sony wishes to remind all of the gamers who had purchased Sony PlayStation 5 to buy upcoming games, add accessories such as wireless controllers, wireless headsets, media remote or HD camera, upgrade the newest software, etc.
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Additional tactical objectives of promotion
There are also additional objectives of any promotional campaign that are tactical in nature. They can be aimed at reassuring the achievement of the key strategic objectives, or serve a very particular promotional objective as tactical objectives are very specific.
Example of tactical objectives of promotion include:
- Building brand awareness ahead of introducing a new product.
- Clearing excess inventory of the old version of the product before launching a new upgraded version.
- Targeting a specific market segment to attract new customers.
- Creating a new campaign aimed at reducing seasonality of demand for the firm’s products.
- Educating current customers about the newest feature of the product.
How objectives of promotion change over the life cycle of a product?
Promotional Mix will vary over the life cycle of any product, so will objectives of promotion. The importance of these three main objectives of promotion will change as the product moves through its entire life cycle:
STAGE 1: INTRODUCTION
In the early stage of introducing the product to the market, the business needs to inform the customers by explaining the nature of the new product, introduce its features and inform about the product characteristics. At this initial stage, customers do have a good understanding of the firm’s offering of goods and services.
ATL: Use informative advertising to make consumers aware of the product.
BLT: Use sales promotion offering free samples of the product or trial periods to encourage customers to try and test the product.
STAGE 2: GROWTH
As the product’s sales start growing and the product moves into the growth stage, the firm needs to persuade new customers to buy the product as well as persuade customers of other brands to change their brand preferences. Using comparative promotion will help the business to gain market share.
ATL: Use persuasive advertising to make customers shift their shopping preferences.
BLT: Use sales promotion to encourage repeated purchases in the attempts to develop brand loyalty.
STAGE 3: MATURITY
When the product has become mature and have been established on the market for a long time, the business needs to remind all loyal customers to repurchase the product from time to time. Also, encouraging customers to buy the product in larger quantities will help the business to maintain sales revenue at the highest level.
ATL: Use reminder advertising to emphasize the difference between the product and the competitors’ products.
BLT: Use sales promotion to encourage brand loyalty.
STAGE 4: DECLINE
In the last stage the business may either try to extend the life cycle of the product by continuous use of reminder advertising, or decide that no extension strategies will be used to extend the life of the product causing the product to be withdrawn from the market entirely.
ATL: Use minimal reminder advertising to maintain some sales.
BTL: Use limited amount of sales promotion and additional support for the product, if the intention is to discontinue selling it.
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To sum things up, the major reason for promotion in a business organizations is to increase sales revenue by attracting new customers and retaining current customers.
The majority of strategic promotions of for-profit businesses are persuasive while non-profit business organizations and government account for the majority of informative promotional campaigns.
