Introduction to Business The Importance of Promotion

Promotion: The Most Important “P”

“Without promotion something terrible happens... Nothing!” - P.T. Barnum
The marketing field has evolved in the last hundred years from the Production Era which believed that “a good product will sell itself” to the relatively new Customer Relationship Era that focuses on “enhancing customer satisfaction and stimulat[ing] long-term loyalty” (12Manage; Nickels & McHugh & McHugh, 2008, p. 351). However, just as important as it is to maintain customers, so is it to first attract them. Indeed, P.T. Barnum, arguably “the most influential American showman of the nineteenth century,” realized that of the 4P's in the marketing mix, promotion is the most important (Seaburg). If little is known about a product, no matter how great it is or how cheap or readily available it is, if the consumer is unaware of such a product, then nothing happens. No sale, no profit. Promotion is the most important of the 4 P's and new technology will continue to underscore the increasing value of good promotion.
Today, promotion has become the most important for a number reasons. Product is a given since consumers expect much more than something that simply passes government standards. Even companies that offer competent but sloppy products will lose business and possibly discourage future business as customers engage in negative word-of-mouth campaigns via Internet against them. Meanwhile, competing on price is not a useful long-term approach as “the consumer is often still sensitive for price discounts and special offers,” techniques that fall under the category of promotion (12manage). Finally, place is no longer an issue as businesses turn increasingly towards the Web. Coupled with the delivery services of companies such as UPS, DHL, Fedex, etc., they can reach customers who are literally on the other side of the world. Thus, promotion remains the most important of the marketing mix and is key to success as emphasis on product, price, and place diminish.
The techniques that encompass promotion can be summed by the Promotion Mix: Advertising, Personal Selling, Public Relations and Sales Promotion. Advertising in the United States alone costs “$245 billion yearly” and companies spend so much on it simply to increase awareness about “products, prices, features, and more” (Nickels et al., 2008, p. 433). Without this essential form of promotion, few would know that there exists certain products that seek to satisfy consumers' different wants and needs. Ways businesses are accomplishing awareness are through product placement in TV shows and movies, infomercials, direct mail, newspaper ads, and most importantly, the Internet. Internet ad spending accounts for only one-eighth of that for television, but there is significant growth in Internet advertising (Nickels et al., 2008, p. 434). Internet advertising may become as important as TV ads in the future since it “allows companies to provide their customers much more information about the value of their products [which] often allows them to attract more customers and thus generate higher sales revenue (Jones and George, 2008, p. 726).
In a world of increasing transparency enabled by technology such as the Internet, public relations is particularly important. Successful public relations “listen to the public,” “develop policies and procedures in the public interest” and “inform people that [the company is] being responsive to their needs” (Nickels et al., 2008, p. 442). Companies that are unresponsive or perceived as such can suffer greatly from negative word-of-mouth and bad publicity. And this is where public relations comes in. The public relations aspect of promotion is key in managing conflicts and trying to get good publicity. Public relation's “talking arm” is publicity, “any information … that's distributed to the public through the media and that's not paid for, or controlled, by the seller” (Nickels et al., 2008, p. 443). Getting publicity is very important since not only is it cost effective (free), it's also “more believable than advertising” (Ibid). Public relations and good publicity will continue to be important as businesses continue through the Customer Relationship Era.
Another popular form of promotion is Sales Promotion. Examples of sales promotion include “trade shows, discounts, catalogs and conventions” and consumer sales promotion techniques such as “coupons, sampling, sweepstakes, bonuses, in-store displays” and more (Nickels et al., 2008, p. 443-4). These tools help stimulate interest in products and are important in increasing awareness of different products. For business-to-business (B2B) sales, trade shows are quite important as “they allow marketing intermediaries to see products from many different sellers and make comparisons among them” (Ibid). With help of the Internet, there are now “virtual trade shows” that “enable buyers to see products without leaving the office” (Nickels et al., 2008, p. 445). With the advent of new technologies, promotion will become “much more interactive than ever before” (Nickels et al., p. 447).
Technology will change the marketplace as consumers become increasingly empowered by access to tools such as Amazon, and eBay on the Internet. The effect is even being felt in B2B transactions such as in the form of virtual trade shows. This new development signals that price, product, and place, though important, will not be as significant as promotion. Before a potential customer even compares products and prices, he or she must first know that the said products exist. The promotion mix can thus be used for accomplishing this needed awareness. Most likely, advertising will shift towards Internet based ads because of their relatively low costs and many benefits including interactivity and convenience. Though P.T. Barnum died in an age well before computers (in 1891), his words continue to ring true today. Thus, successful businesses will always be on the lookout for ways to increase awareness and promote their product. After all, “two-thirds of promotion is motion.”




References

George, J. M., & Jones, G. R. (2007). Contemporary Management. New York: McGraw-Hill/Irwin.

McHugh, J. M., McHugh, S. M., & Nickels, W. G. (2008). Understanding Business 8th Edition 2008. New York: Mcgraw Hill.

Promotion Quotes | Quotes Daddy. (n.d.). Retrieved August 7, 2009, from http://www.quotesdaddy.com/tag/Promotion

Seaburg, A. (n.d.). P. T. Barnum. Retrieved August 7, 2009, from www25.uua.org/uuhs/duub/ar

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Executive Fast Track. (n.d.). Marketing Mix (4P's). Retrieved August 7, 2009, from http://www.12manage.com/methods_marketing_mix.html

Unknown, Source quote - Two-thirds of promotion is motion.... (n.d.). Retrieved August 8, 2009, from http://quotationsbook.com/quote/795/