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MGTA04 Chapter 8.docx

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University of Toronto Scarborough
Management (MGT)
H Laurence

Promoting Products and Services  Promotion: any technique designed to sell a product part of communication mix: the total message a company send to consumers about its product Information and Exchange Values  In free market systems: a business uses promotional methods to communicate information about itself and its products to consumers and industrial buyers purpose is to influence purchasing decisions  Make consumers aware of products  Make consumers knowledgeable about products  Persuade consumers to like products  Persuade consumers to purchase products  Buyers gain from this exchange (more attractive product), as does seller (sales and profit)  Successful promotions provide communication about the product and create exchanges that satisfy consumer and firms needs  Promotion determines the success or failure of any business or product Promotional Objectives  Ultimate objective is to increase sales, however promotion is also used for various other things  Communicating information  Positioning products via product positioning: the establishment of an easily identifiable image of a product in the minds of consumers company tries to appeal to a specific segment of the market rather than to the market share as a whole  Adding Value: communicates values + benefits of the products to consumers  Controlling sales volume: by increasing promotional activities in slow periods, firms can achieve more stable sales volume throughout the year they can thus keep production and distribution systems running evenly Promotional Strategies  Promotional strategy: used to achieve promotional objectives  Push strategy: company aggressively pushes its product through wholesalers and retailers, which persuades customers to buy it  Pull strategy: company appeals directly to customers, who demand the product from retailers, which demand the product from wholesalers  Advertising pulls while selling pushes  Some companies use a mix of the two (big firms i.e. general mills cereals) and some use push i.e. makers of industrial products The Promotional Mix  There are four types of promotional tools: advertising, personal selling, sales promotions, and publicity  the best promotional mix (combination of these tools) depends on many factors (most important=target audience)  Promotional mix: the portion of marketing concerned with choosing the best combination of advertising, personal selling, sales promotions, and publicity and public relations to sell a product  The Target Audience: Promotion and the Buyer Decision Process o Problem/ Need recognition via public advertisement o Information Seeking via personal selling o Evaluation of Alternatives via personal selling o Purchase Decision via sales promotion and personal selling o Post Purchase evaluation via advertising and personal selling Advertising Promotions  Advertising: promotional tool consisting of paid, non-personal communication used by an identified sponsor to inform an audience about a product Advertising Strategies  Advertising strategies depend on which stage of the product life cycle the product is in  Introduction stage informative advertising: goal is to make potential customers aware that a product exists  Growth stage Persuasive advertising: the goal is to influence the customer to buy the firms product rather than the similar product of a competitor (can influence a larger number of consumers to buy a firms products)  Maturity StageComparative advertising: Goal is to influence the customer to switch from a competitors similar product to the firms product by directly comparing the two products makes firms brand look better  Decline stage/latter part of maturity stage reminder advertising: goal is to keep product’s name in the minds of customers Advertising Media  Advertising medium: the specific communication device used to carry a firm’s advertising message to potential customers  Newspapers: widely used advertising medium, but are in decline now but still offer flexible, rapid coverage since ads can change from day to day but are thrown out everyday  Television: allows advertisers to combine sight, sound and motion appeals to all of viewers senses viewer demographics can help reach target audiences but too many ads cause viewers to confuse products and is also pretty costly (PVR’s allows ads to be forwarded=bad)  Direct Mail: Printed advertisements, such as flyers, mailed directly to consumers homes or places of business  Radio: ads more inexpensive and give firms a high degree of customer selectivity but since its only audio consumers play it in the background while doing other things (may be ineffective at times)  Magazines: Allows for excellent reproduction of photographs and artwork used to grab buyers attention and convince them of the products value also allows space for detailed product information and have a long life since they can be passed from person to person (increases exposure)  Outdoor advertising: Billboards, signs, and advertisements on buses, taxis and subways  relatively inexpensive, races little competition for customer attention and is subject to high repeat exposure but can present limited information and sellers have little control over who sees their ads  Word of Mouth: opinions about the value of products, passed among consumers in informal discussions when word of mouth/buzz marketing says a product is good then higher product sales are likely  The internet: refers to buying and selling processes that make use of electronic technology=ecommerce. Internet mar
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