Author: Jim Riley Last updated: Sunday 23 September, 2012
It is helpful to define the five main elements of the promotional mix before considering their strengths and limitations.
Advertising is any paid form of non-personal communication of ideas or products in the "prime media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to persuade and to inform.
The two basic aspects of advertising are the message (what you want your communication to say) and the medium (how you get your message across)
Direct marketing creates a direct relationship between the customer and the business on an individual basis.
Personal selling refers to oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale".
Sales promotion refers to the provision of incentives to customers or to the distribution channel to stimulate demand for a product.
Public relations is the communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly
Factors that determine the type of promotional tools used
Each of the above components of the promotional mix has strengths and weaknesses. There are several factors that should be taken into account in deciding which, and how much of each tool to use in a promotional marketing campaign:
(1) Resource availability and the cost of each promotional tool
Advertising (particularly on television and in the national newspapers can be very expensive). The overall resource budget for the promotional campaign will often determine which tools the business can afford to use.
(2) Market size and concentration
If a market size is small and the number of potential buyers is small, then personal selling may be the most cost-effective promotional tool.
A good example of this would be businesses selling software systems designed for supermarket retailers. On the other hand, where markets are geographically disperse or, where there are substantial numbers of potential customers, advertising is usually the most effective.
(3) Customer information needs
Some potential customers need to be provided with detailed, complex information to help them evaluate a purchase (e.g. buyers of equipment for nuclear power stations, or health service managers investing in the latest medical technology). In this situation, personal selling is almost always required - often using selling teams rather than just one individual.
By contrast, few consumers need much information about products such as baked beans or bread. Promotional tools such as brand advertising and sales promotion are much more effective in this case.