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Why is Promotion Significant for a Business?

Updated: Dec 26, 2022

Learn the basics of Business Promotion

When it comes to creating an impact as a business, promotion plays a significant role. How could companies gain attention from their potential customers without promoting the products?

I have completed several marketing internships in the past, but never actually learned about "Promotion" as a subject as I have had no business class at school. So today, based on my notes from self-research and experiences, I would like to share basic elements on the topic "Promotion":

Promotion methods are highly competitive and expensive. While the top priority of promoting a brand/product is put on attracting the audience, manufacturers and retailers have different purposes:

  • Into the pipeline promotion (Manufacturers -> Retailers):

Manufacturers' most important job is to promote their products to retailers and encourage them to continue buying from them.

  • Out of the pipeline promotion (Retailers -> Customers):

While acquiring sufficient stocks of products from manufacturers, retailers need to promote the product to customers to encourage them to buy the product. I will describe the 7 most common promotion methods below.

7 Types of Promotion:

1. General Advertising

  • Purposed for raising recognition & awareness; no specific target audience

  • Eg. mass media advertising (TV, magazines, billboards, radio)

  • Pros: attract a large number of people, used in various ways

  • Cons: traditional

2. Direct Marketing

  • Reach out to particular companies/individuals to inform them of the products, services, upcoming sales, etc.

  • Eg. targeted e-mail campaigns, phone calls, distributing flyers.

  • Pros: fast & direct

  • Cons: difficult reaching out to people, unfairness considered

3. Sales Promotion

  • Appealing short-term benefits to customers to increase the overall demand and sales.

  • Eg. seasonal discounts, giveaways, buy one get one free, coupons, and loyalty rewards.

  • Pros: an effective way to sustain popularity during holiday seasons, and prove competitive values to customers.

  • Cons: temporary attraction for customers

4. Digital Marketing

  • Advertise online, often requiring a small number of costs.

  • Eg. social media marketing, content marketing, search engine optimization, etc.

  • Pros: innovative & efficient in terms of operation on a global scale in a small amount of time.

  • Cons: misunderstanding between the company and customers, the spread of misinformation.

5. Personal Selling

  • Involves person-to-person communication for developing meaningful relationships with clients & customers.

  • Eg. face-to-face/virtual meetings with customers -> car dealerships

  • Pros: critically effective for particular industries & start-ups

  • Cons: Inappropriate flow of money often occur.

6. Public Relations (PR)

  • Campaigns for maintaining the company's public image.

  • Eg: social media endorsements, press releases, publicity stunts, etc.

  • Pros: the best way to maintain, enhance, or rebuild the brand's reputation.

  • Cons: Unsuccessful PR, negatively influences the brand's image on a large scale.

7. Sponsorship

  • The company pays a fee to a person or helps fund an event in return for publicity and advertising.

  • Eg. a restaurant hiring a TikToker for promoting the opening of the restaurant.

  • Pros: most common for increasing popularity, sales & reputation, can improve the credibility of advertisements by partnering with well-known brands/individuals.

  • Cons: not all companies have the opportunity to use this promotion.

I hope there were some new gains you attained from this article on "promotion". For any requests on future topics, please leave a comment!!

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