Basic Concept: Promotion

Let's talk about promotion, the second of the four p's. This aspect of the marketing mix covers the methods of communication that a marketer uses to provide information about its product. Typically we think of this information as being persuasive in nature with a goal of getting customers to buy your product instead of its competitors. This information can be both verbal and visual. Thus a promotional strategy can influence customers by appealing to either their intellect or to their emotions. 

For example, Coke has built an incredible degree of awareness and interest in its brand from a century of effective promotional campaigns. In 2013 alone Coke spent 3.3 billion, that's 3.3 billion U.S. dollars on advertising, mostly on television. So from 100 years of successful promotions Coke is now one of the world's most recognizable brands, as the world's most popular soft drink. As indication of this promotional success the word Coke is the second most recognized word on the planet, just after okay. That's impressive. Coke has historically focused more on visual versus verbal information in an attempt to build an emotional bond with its brand. Now that we've discussed what promotion is and given an example let's talk about a few key concepts. This portion of the marketing mix has a number of important concepts including personal selling, sales promotion and word of mouth. In this module we're focused on two of the most fundamental concepts of promotion; that's advertising and persuasion. Let's talk about advertising first. Over the past 100 years the most popular promotional technique has been advertising, with television advertising accounting for the largest portion of most firms' promotional budgets. Even today most firms still spend more on television ads than they do on internet advertising. Let's take a couple of examples. In 2013 Walt Disney spent $524 million on television ads but only 140 million on internet advertising. Likewise Toyota spent 959 million on television but only 112 million on the internet. Most advertising, either internet or television, is targeted towards either existing or potential customers. However advertising can also be directed to other audiences such as a firm's distribution partners, like retails, or even to its employees to build morale for its company and its brand. 

Regardless of the target the goal of advertising is to elicit some type of response. Though different types of responses that a firm may seek, for example, a new brand may focus on developing awareness for its brand while an established brand may focus on changing perceptions about itself. Most ads are carefully planned and carefully developed. Usually a firm will hire a professional advertising agency to create an advertising campaign and will careful pretest these ads before they're launched. And then once after an advertising campaign is launched a firm will usually have a professional marketing research company track the ad to assess its effectiveness and decide when it needs to develop a new campaign. 

Let's now switch to the topic of persuasion. As noted earlier the primary goal of any promotional campaign is to try to persuade customers to buy a firm's products instead of its competitors' products. Thus marketers often think of promotion as a form of persuasion and employ a number of different persuasion tactics such as celebrity endorsements, humor or scientific claims. 

In order to understand how persuasion works academics had to develop lots of different theories. The most popular theory about persuasion is what's called the Elaboration Likelihood Model or ELM, which was developed in the 1970s by a couple of scholars at Ohio State University. According to this model there are two main routes to persuasion. We have the central route and the peripheral route. The idea is that the central route is cognitive in nature while the peripheral route is more emotion in nature. 

According to this theory the central route is effective when customers have the ability and the motivation to process a persuasion message and the persuasion occurs when we find the information provided to be both newsworthy and also believable. In contrast the peripheral route is more effective when customers lack the ability and motivation to process a message and occurs when we perceive the provider of the message to be either credible or attractive. These two ads from Carl's Jr, which is a restaurant chain in the U.S., are good examples of these two different persuasion routes. As you can see one is much more focused on the message. The other is more focused on the provider of the message. 

Regardless of which route is employed persuasion tactics focus on trying to convince customers that a product is appealing and based on the premise that a firm just needs to find the right message or the right message provider to be effective. That's what we usually think about promotion. So what's changing? 

Well historically most large firms have devoted most of their promotional budget to advertising, and most of this advertising expenditures went to television advertisement, which was developed by professional advertising agency. And although a small number of customers are asked to provide their opinions about these ads through techniques such as concept testing, this process is largely top down in focus and most ads are designed to persuade a customer to buy a firm's products by first getting attention for its brand and then persuading them to purchase it. That's the traditional model. Now this top down approach is starting to break down due to the rise in digital tools. For example, Jones Soda has built a successful franchise, and here's a bottle of Jones Soda, not through television advertising. In fact it spends no money on advertising at all, has a very small advertising budget. Instead its entire promotional campaigns are created by its customers. This includes television ads that are shown on YouTube, for example. But also the label for its soda. So all of its labels are sent in, are photographs sent in by its customers. Now this particular photograph shows an ice cream vendor on a beach and it was sent by a person named Michelle Blackburn in Indiana. And if you see on the side of this soda this company expresses this strong ethos of using customer content to promote its product. So they say send us your photo, if we like it we'll put it on our label. And that's what they do. In this new digital marketing environment we are moving from managed messages designed to persuade to authentic messages designed to narrate or tell a story. In this module we'll discuss how new digital tools are changing this element of the marketing mix and redefining how we think about promotion.