Promoting a Product

Learning Objective

Describe the elements of the promotion mix.

Your promotion mix—the means by which you communicate with customers—may include advertising, personal selling, sales promotion, and publicity. These are all tools for telling people about your product and persuading potential customers, whether consumers or organizational users, to buy it. Before deciding on an appropriate promotional strategy, you should consider a few questions:

What’s the main purpose of the promotion? Am I simply trying to make people aware of my product, or am I trying to get people to buy it right now? Am I trying to develop long-term customers? Am I trying to connect with my current customers? Am I trying to promote my company’s image?
What’s my target market? What’s the best way to reach it?
Which product features (quality, price, service, availability, innovativeness) should I emphasize? How does my product differ from those of competitors?
How much can I afford to invest in a promotion campaign?
How do my competitors promote their products? Should I take a similar approach?

To promote a product, you need to imprint a clear image of it in the minds of your target audience. What do you think of, for instance, when you hear “Ritz-Carlton”? What about “Motel 6”? They’re both hotel chains, but the names certainly conjure up different images. Both have been quite successful in the hospitality industry, but they project very different images to appeal to different clienteles. The differences are evident in their promotions. The Ritz-Carlton Web site describes “luxury hotels” and promises that the chain provides “the finest personal service and facilities throughout the world.”^[1] Motel 6, by contrast, characterizes its facilities as “discount hotels” and assures you that you’ll pay “discount hotel rates.”^[2]

Promotional Tools

We’ll now examine each of the elements that can go into the promotion mix—advertising, personal selling, sales promotion, and publicity. Then we’ll see how Wow Wee incorporated them into a promotion mix to create a demand for Robosapien.

Advertising

Advertising is paid, nonpersonal communication designed to create an awareness of a product or company. Ads are everywhere—in print media (such as newspapers, magazines, the Yellow Pages), on billboards, in broadcast media (radio and TV), and on the Internet. It’s hard to escape the constant barrage of advertising messages; indeed, it’s estimated that the average consumer is confronted by about five thousand ad messages each day (compared with about five hundred ads a day in the 1970s).^[3] For this very reason, ironically, ads aren’t as effective as they used to be. Because we’ve learned to tune them out, companies now have to come up with innovative ways to get through to potential customers. A New York Times article^[4] claims that “anywhere the eye can see, it’s likely to see an ad.” Subway turnstyles are plastered with ads for GEICO auto insurance, Chinese food containers are decorated with ads for Continential Airways, parking meters display ads for Campbell’s Soup,^[5] examining tables in pediatricians’ offices are covered with ads for Disney’s Little Einsteins DVDs, school buses play radio ads for children, “Got Milk” billboards at San Francisco bus stops give off the smell of chocolate chip cookies, and U.S. Airways is even selling ads on motion sickness bags (yuck!).^[6] Even so, advertising is still the most prevalent form of promotion.

Your choice of advertising media depends on your product, your target audience, and your budget. A travel agency selling spring-break getaways to college students might post flyers on campus bulletin boards or run ads in campus newspapers. A pharmaceutical company trying to develop a market for a new allergy drug might focus on TV ads that reach a broad audience of allergy sufferers. A fitness center might purchase a Google ad that appears next to the search results when someone puts in a relevant keyword, such as fitness. A small hot dog and hamburger stand will probably spend its limited advertising budget on ads in the Yellow Pages and local newspapers (or pay a broke college student to stand by the side of the road dressed in a hot dog costume and hold a sign that entices potential customers to “come on in”). The cofounders of Nantucket Nectars found radio ads particularly effective. Rather than pay professionals, they produced their own ads themselves. (Actually, they just got on the radio and started rambling about their product or their lives or anything else that seemed interesting at the time.)^[7] As unprofessional as they sounded, the ads worked, and the business grew.

Personal Selling

Personal selling refers to one-on-one communication with customers or potential customers. This type of interaction is necessary in selling large-ticket items, such as homes, and it’s also effective in situations in which personal attention helps to close a sale, such as sales of cars and insurance policies.

Many retail stores depend on the expertise and enthusiasm of their salespeople to persuade customers to buy. Home Depot has grown into a home-goods giant in large part because it fosters one-on-one interactions between salespeople and customers. The real difference between Home Depot and everyone else, says one of its cofounders, isn’t the merchandise; it’s the friendly, easy-to-understand advice that salespeople give to novice homeowners. Customers who never thought they could fix anything suddenly feel empowered to install a carpet or hang wallpaper.^[8]

“Congratulations! You can spend two free nights at any Hyatt Hotel in the world! All you have to do is sign up for a Hyatt-branded credit card.”^[9] This tactic is a form of sales promotion in which a company provides an incentive for a potential customer to buy something. Most sales promotions are more straightforward than our hotel stay/credit-card offer. Promotional giveaways might feature free samples or money-off coupons. Promotions can involve in-store demonstrations or trade-show displays. They can be cheaper than advertising and can encourage customers to buy something quickly.

Apple Inc. and Starbucks partner to promote the iTunes experience by giving away free iTunes products, including a “Pick of the Week” music download, apps, book samples from the iBookstore, TV shows, and games. The current app giveaway is the Shazam Encore App, a music recognition service that allows users to immediately identify any song that’s playing, see the lyrics, watch the music videos, purchase concert tickets, and buy the track and share it with friends on Facebook and Twitter. The joint promotion benefits both companies: Apple gets to plug its iTunes download and other products, and Starbucks entices customers to come into its stores, enjoy free Wi-Fi, and buy coffee.^[10]

Publicity and Public Relations

Free publicity—say, getting your company or your product mentioned in a newspaper or on TV—can often generate more customer interest than a costly ad. You may remember the holiday season buying frenzy surrounding a fuzzy red doll named “Tickle Me Elmo.” The big break for this product came when the marketing team sent a doll to the one-year-old son of talk-show host Rosie O’Donnell. Two months before Christmas, O’Donnell started tossing dolls into the audience every time a guest said the word wall. The product took off, and the campaign didn’t cost marketers anything except a few hundred dolls.^[11]

Consumer perception of a company is often important to a company’s success. Many companies, therefore, manage their public relations in an effort to garner favorable publicity for themselves and their products. When the company does something noteworthy, such as sponsoring a fund-raising event, the public relations department may issue a press release to promote the event. When the company does something negative, such as selling a prescription drug that has unexpected side effects, the public relations department will work to control the damage to the company. Each year, the accounting firm of PricewaterhouseCoopers and the Financial Times jointly survey more than a thousand CEOs in twenty countries to identify companies that have exhibited exceptional integrity or commitment to corporate governance and social responsibility. Among the companies circulating positive public relations as a result of a survey were General Electric, Microsoft, Coca-Cola, and IBM.^[12]

Marketing Robosapien

Now let’s look more closely at the strategy that Wow Wee pursued in marketing Robosapien in the United States. The company’s goal was ambitious: to promote the robot as a must-have item for kids of all ages. As we know, Wow Wee intended to position Robosapien as a home-entertainment product, not as a toy. The company rolled out the product at Best Buy, which sells consumer electronics, computers, entertainment software, and appliances. As marketers had hoped, the robot caught the attention of consumers shopping for TV sets, DVD players, home and car audio equipment, music, movies, and games. Its $99 price tag was also consistent with Best Buy’s storewide pricing. Indeed, the retail price was a little lower than the prices of other merchandise, and that fact was an important asset: shoppers were willing to treat Robosapien as an impulse item—something extra to pick up as a gift or as a special present for children, as long as the price wasn’t too high.

Meanwhile, Robosapien was also getting lots of free publicity. Stories appeared in newspapers and magazines around the world, including the New York Times, the Times of London, Time magazine, and National Parenting magazine. Commentators on The Today Show, The Early Show, CNN, ABC News, and FOX News remarked on it; it was even the talk of the prestigious New York Toys Fair. It garnered numerous awards, and experts predicted that it would be a hot item for the holidays.

At Wow Wee, Marketing Director Amy Weltman (who had already had a big hit with the Rubik’s Cube) developed a gala New York event to showcase the product. From mid- to late August, actors dressed in six-foot robot costumes roamed the streets of Manhattan, while the fourteen-inch version of Robosapien performed in venues ranging from Grand Central Station to city bars. Everything was recorded, and film clips were sent to TV stations.

Then the stage was set for expansion into other stores. Macy’s ran special promotions, floating a twenty-four-foot cold-air robot balloon from its rooftop and lining its windows with armies of Robosapien’s. Wow Wee trained salespeople to operate the product so that they could help customers during in-store demonstrations. Other retailers, including The Sharper Image, Spencer’s, and Toys “R” Us, carried Robosapien, as did e-retailers such as Amazon.com. The product was also rolled out (with the same marketing flair) in Europe and Asia.

When national advertising hit in September, all the pieces of the marketing campaign came together—publicity, sales promotion, personal selling, and advertising. Wow Wee ramped up production to meet anticipated fourth-quarter demand and waited to see whether Robosapien would live up to commercial expectations.

Key Takeaways

The promotion mix—the ways in which marketers communicate with customers—includes all the tools for telling people about a product and persuading potential customers to buy it.
Advertising is paid, nonpersonal communication designed to create awareness of a product or company.
Personal selling is one-on-one communication with existing and potential customers.
Sales promotions provide potential customers with direct incentives to buy.
Publicity involves getting the name of the company or its products mentioned in print or broadcast media.

Exercises

(AACSB) Analysis
Companies encourage customers to buy their products by using a variety of promotion tools, including advertising, personal selling, sales promotion, and publicity. Your task is to develop a promotion strategy for two products—the Volkswagen Jetta and Red Bolt soda. For each product, answer the following questions:
- What’s the purpose of the promotion?
- What’s your target market?
- What’s the best way to reach that target market?
- What product features should you emphasize?
- How does your product differ from competitors’?
Then describe the elements that go into your promotion mix, and explain why you chose the promotional tools that you did.

[1] “About Us,” Ritz-Carlton, http://corporate.ritzcarlton.com/en/about/goldstandards.htm (accessed October 21, 2011).

[2] “Motel 6 Corporate Profile,” Motel 6, http://www.motel6.com/about/corpprofile.aspx (accessed October 21, 2011).

[3] Caitlin A. Johnson, “Cutting Through Advertising Clutter,” CBS News, February 11, 2009, http://www.cbsnews.com/stories/2006/09/17/sunday/main2015684.shtml (accessed October 20, 2011).

[4] Louise Story, “Anywhere the Eye Can See, It’s Likely to See an Ad,” The New York Times, January 15, 2007, http://www.nytimes.com/2007/01/15/business/media/15everywhere.html?pagewanted=all.

[5] Seth Godin, Permission Marketing: Turning Strangers into Friends, and Friends into Customers (New York: Simon & Schuster, 1999), 31.

[6] Louise Story, “Anywhere the Eye Can See, It’s Likely to See an Ad,” The New York Times, January 15, 2007, http://www.nytimes.com/2007/01/15/business/media/15everywhere.html?pagewanted=all.

[7] Nantucket Allserve, Inc., “Nantucket Nectars from the Beginning,” http://www.juiceguys.com (accessed October 13, 2011).

[8] Kevin J. Clancy, “Sleuthing for New Products, Not Slashing for Growth,” Across the Board, September–October 2001, http://www.copernicusmarketing.com/about/docs/new_products.htm (accessed May 21, 2006).

[9] “Hyatt and Chase Launch First Ever Hyatt-Branded Credit Card,” Hyatt Hotels and Resorts, http://www.hyattpressroom.com/content/hyatt/en/news_releases0/2010/Hyatt-And-Chase-Launch-First-Ever-Hyatt-Branded-Credit-Card.html (accessed October 21, 2011).

[10] Kelly B., “Pick of the Week: Apps, Books, TV, Music and More!” Starbucks Blog, August 22, 2011, http://www.starbucks.com/blog/pick-of-the-week-apps-books-tv-music-and-more-/1064 (accessed October 22, 2011).

[11] “Tickle Me Elmo: Using the Media to Create a Marketing Sensation,” Media Awareness Network,, http://www.media-awareness.ca/english/resources/educational/handouts/advertising_marketing/tickle_me_elmo.cfm (accessed October 13, 2011).

[12] “PwC/Financial Times Survey: ‘World's Most Respected Companies 2005’” PricewaterhouseCoopers and the Financial Times, www.finfacts.ie/biz10/worldsmostrespectedcompanies.htm , (accessed October 13, 2011).