Promoting and Selling: 

7.3 Nature of Product and Promotion: 

7.3.1 Promotion:

• In order to sell more of its products, a business has to change its customers’ behaviour through information or persuasion. This is achieved through promotion. 

• The role of promotion is to inform, persuade and remind consumers about a business’s products with the aim of: 

• Attracting new customers by raising awareness of a particular product.

• Increasing brand loyalty by reinforcing the image of the product 

• Encouraging existing customers to purchase more of the product

• Encouraging new and existing customers to purchase new products. 

• A promotion mix is the various promotion strategies a business uses in its promotional campaign: advertising, personal selling, relationship marketing, opinion leaders, publicity, public relations and sales promotion. 

Advertising: 

• A paid, non-personal message communicated through a mass medium

• The main advantage of advertising is that it provides businesses with the flexibility to reach an extremely large audience or to focus on a small, distinct segment of the population.

• Advertising may take many forms, from buying time on national television, to inexpensive leaflets or posters, to internet banner advertisements. 

• Advertising media is a term for the many forms of electronic and print communication used to reach an audience and includes: 

• Mass marketing - television, radio, newspapers and magazines 

• Direct marketing catalogues - catalogues mailed to individual households

• Telemarketing - The use of the telephone to personally contact a customer. 

• E-marketing - the use of the internet to deliver advertising messages

• Social Media Advertising - online advertising using social media such as Facebook and twitter. 

• Billboards - Large signs in strategic locations. 

Personal Selling: 

• Involves the activities of a sales representative directed to a customer in an attempt to make a sale. 

• Main benefits of personal selling are that the sales consultant can modify the message to suit the circumstances of individual customers and that this type of assistance, if done well, can help to create a long-term relationship resulting in repeat sales. The success of this strategy, therefore, depends on the competency of the business’s sales force. 

Relationship Marketing: 

• Long-term relationships with individual customers, a process known as relationship marketing. The ultimate aim is to create customer loyalty by meeting the needs of customers on an individual basis, thereby keeping customers coming back. This can be achieved through customer care, good after-sales service or the use of loyalty programs.

Opinion Leaders: 

• A person who influences others

• Their opinions are respected and they are often sought out for advice. Marketing managers use opinion leaders as information outlets for new products or to endorse an existing one. 

• Actors, athletes, musicians and models are regarded by some groups as opinion leaders and many businesses use celebrity endorsement as part of their marketing strategies. 

• Celebrity endorsement involves using a well-known person to use their wide appeal to become a brand ambassador to help market a product. 

• These promotion strategies help to improve the customer’s image of a product or brand. Additionally sponsored posts from celebrities on their social media platforms can boost sals enormously because consumers want to be just like their idol by using the same products. 

Publicity: 

• Any free news story about a business. It differs from advertising in that is is free and it is timing is not controlled by the business. The main aims of publicity are to: 

• Enhance the image of a product 

• Raise awareness of a product 

Public Relations: 

• Activities aimed at creating and maintaining favourable relations between a business and its customers.

• It is the role of public relations personnel design, implement and manage the public relations personnel to design, implement and manage the public relations of the business. E.g making speeches on special occasions, attention-seeking gestures or donations. 

Sales Promotion: 

• A business may decide to offer a direct inducement to customers in an attempt to sell more of its products. This type of promotion is referred to as sales promotion and aims to:

• Entice new customers 

• Encourage a trail purchase of a new product.

• Examples of sales promotion include: 

1. Coupons: offer discounts on particular items by a state amount at the time of purchase 

2. Loyalty reward programs: offer ‘rewards’ to those ‘loyal’ customers who purchase specified amounts or make repeat purchases. 

3. Premiums: A gift that a business offers the customer in return for using the product. 

4. Refunds: Part of the purchase price is given back to those customers who send in a voucher with a specific proof of purchase. 

5. Samples: A sample is a free item or container of a product. 

7.3.2 The Role of Gender in Product Promotion: 

• Two major criticisms of some promotion stratergies, particularly advertising, relate to gender. First is the use of stereotypical images of male and female roles. E.g in most advertisments it tends to be the male who uses the power tools, or who watches sport with is mates. Females, on the other hand, are portrayed preparing meals, cleaning the house or caring for the children. 

• The second major criticism refers to the overuse of sexual themes and connotations to sell products. Some advertisers targer certain groups and appeal to personal desires suchas physical and sexual attractiveness. Unrealistic images are portrayed as attainable. Sex appeal can be found in advertisements for products ranging from motor vehicles to toothpaste. 

• The rise of the ethical consumer means some businesses try to adress. ALL consumer needs by focusing on gender inclusive advertising rather than traditional gender stereotypes. This trend means that we are seeing more gender inclusive campaigns for physical strength by brands such as Adidas and Nike and also in campigns for beauty products. 

• The modernisation of gender within product promotion can prove successful to open and ethical consumers but can also lose customers who are more traditional. 

7.4 Targeting Customers: 

7.4.1 Processes used to Target Consumers: 

• A business will divide the market into distinc segments. A business that is marketing motor vehicles, for example, would not direct its marketing efforts towards every person in the total vehicle market. The business would this direct its efforts towards a particular segment of the total market for motor vehicles. 

• Market segmentation occurs when the total market is subdivided into groups of people who share one or more common characteristics. The main features used to segment the total market are: 

• Age

• Gender 

• Income Level 

• Educational Background 

• Geographical Location 

• Lifestyle 

• Family Structure.

• Once the market has been segmented, the business selects one of these segments to become the target market. 

• The ultimate aim of market segmentation is to increase sales and profits by better understanding and responding to the desires of the target customers. 

Appropriate target markets for particular products: 

• Target market refers to the group of customers to which a business intends to sell its product. 

• Sometimes, a business may be able to identify both a primary target market and a secondary target market. . A business’s primary target market will generate most of its revenue. These are the customers who are loyal to a particular business and make repeat purchases. 

• The secondary target market provides an alternative in case there is a loss of customers from the primary target market.

• A business selects a target market so it can direct its marketing strategies to that group of customers, rather than the total market.

7.4.2 How Promotion Strategies Target Young People and Particular Groups in the Community: 

• Young people represent an important demographic to marketers because, in addition to being consumers themselves, they also influence the purchasing decisions of their friends and family.

• The amount of money spent on advertising to children has exploded over the past two decades. Parents today are willing to buy more for their kids because social influences such as smaller family sizes, dual incomes and postponing having children until later in life means that families have more disposable income. Marketers take advantage of this and have developed different strategies to target young people. These include: 

• Building brand loyalty: marketers try to lay the groundwork of brand recognition in very young children. 

• The internet and social media: this is a very popular medium that marketers use to target children because the internet is now such a huge part of children’s lives. Sophisticated technologies make it easy for businesses to collect information from young people and to then target them with personalised advertising.

• Pester power: rather than targeting parents, many businesses rely on kids to pester their parents to buy products. ‘Pester power’ refers to children’s ability to nag their parents into purchasing products they may not otherwise buy.

• Psychology and research: companies have used the help of researchers and psychologists to get access to in-depth knowledge about children’s developmental, emotional and social needs so they can find out what makes them tick. 

• Buzz marketing: this refers to creating interest in a product or service by maximising word-of-mouth. It involves generating excitement about a product so that people will want to tell others about it. Getting people to talk about a product, increases brand awareness and hopefully sales. 

Regulation of Advertising Targeting Young People: 

• The Competition and Consumer Act 2010 is one of the most important laws regulating marketing. 

• n addition to this legislation, a code of ethics was developed in 2012 for marketers in relation to advertising — the Australian Association of National Advertisers (AANA) Code of Ethics 2012.

• The role of the ASB is to ensure that the Code of Ethics is followed. They do this by administering a national system of advertising self-regulation through the Advertising Standards Board and the Advertising Claims Board.

• In 2014, the AANA adopted the Code for Advertising & Marketing Communications to Children

• The object of this code is to ensure that advertisers and marketers develop and maintain a high sense of social responsibility in advertising and marketing to children in Australia.

• The children’s code upholds strict regulations relating to advertising or marketing that targets children. For example, advertising must not:

• portray images that show unsafe use of goods or services, encourage dangerous activities or create unrealistic impressions about safety

• be misleading or deceptive towards children

• include sexual images or imply that using a business’s goods or services will enhance a child’s sexuality

• portray images that may unduly frighten or distress children

• use popular personalities (including any animated personalities) to advertise or market goods or services to the extent that it is unclear whether it is a commercial promotion or program content

• promote unhealthy eating and drinking habits.

7.5 Legal and Ethical Issues Arising from Particular Product Promotion: 

7.5.1 Legal issues: 

• The Competition and Consumer Act 2010 (Cwlth) is one of the most important laws affecting marketing and business practices in Australia. A major purpose of the Act is to protect consumers against undesirable practices, such as misrepresenting the contents of products or their place of production, and misleading and deceptive advertising.

• The Australian Consumer Law (ACL), which is Schedule 2 to the Competition and Consumer Act, includes uniform consumer protection and outlines specific clauses relating to the treatment of customers.

• Even though the Competition and Consumer Act makes deceptive or misleading advertising illegal, a number of methods are still used by some businesses. Examples of deceptive and misleading advertising include:

• Fine print: where important conditions are written in a small-sized print and so are difficult to read.

• Before and after advertisements: consumers may be misled by ‘before’ and ‘after’ advertisements, where the comparison is distorted so that ‘before’ images are worsened and ‘after’ images enhanced.

• Tests and surveys: some advertisements make unsubstantiated claims; for example, stating ‘9 out of 10 people’ prefer a product when no survey has been conducted.

• Packaging: the size and shape of the package may create a misleading impression of the contents.

• Special offer: advertisements may be misleading or deceptive if they imply that a special offer is available for only a limited period, when in fact the offer is continuously available.

• Bait advertising: this occurs when a business advertises items for sale at low prices to attract customers to a business, but the items are not available in reasonable quantities. When customers attempt to buy the items at the advertised price, they are told the items are out of stock and are offered a more expensive item.

7.5.2 Ethical Issues: 

• Ethics are standards that define what is acceptable and unacceptable behaviour. It is concerned with what is morally right or wrong — and all the shades of grey in between.

• While some of the marketing strategies outlined here might be legal, they are still considered wrong or unethical.

•  Ethical businesses should ensure their advertising is truthful because they can be held morally responsible for misleading the public by using an untruth in an advertisement.

Invasion of Privacy: 

• The growth in online advertising is raising a number of ethical issues, with the most serious being the tracking of web users and using this information to target them with advertisements. - this may breach consumer privacy. 

• Many consumers are unaware that data is being collected on them. This behavioural data is collected and resold by data exchange companies and then used by businesses for target advertising purposes. 

Creation of Needs - Materialism: 

• Materialism is an individual’s desire to constantly acquire possessions.

• However, critics of product promotion feel that most businesses, especially large businesses, use sophisticated and powerful promotional strategies (particularly advertisements) to persuade and manipulate customers to buy whatever the firm wants to sell.

Product Placement: 

•  Various companies spend hundreds of millions of dollars placing their products in movies and television shows.

• The inclusion of advertising in entertainment is a promotion strategy referred to as product placement. 

• Businesses are keen to use this promotional technique because it allows them to reach savvy, but advertisement-weary, consumers. However, critics of product placement argue that, because of its ‘concealed’ nature, this type of advertising blurs the line between what is advertising and what is entertainment.

7.5.3 The use of Indigenous Cultural and Intellectual Property: 

• If you walk into any souvenir shop in Australia, you will likely see many products with Aboriginal designs and artwork. What most tourists and consumers don’t know is that most of these items are either made by non-Indigenous Australians or mass produced overseas. 

• According to the Arts Law Centre of Australia, around 80 per cent of Indigenous art products marketed to tourists are unauthentic.

• Many aboriginal artists have had their artwork stolen 

• Copying someone else’s original artwork is an abuse of copyright and is intellectual property theft. However, if somebody uses a factory overseas to produce something with an Aboriginal design, but they don’t copy anyone else’s work directly, then this is not illegal, because Aboriginal designs are not protected under Australian law. Under the Competition and Consumer Act, it is not illegal for fake imports to be sold, as long as they do not claim to be authentic and have a label stating where they are made.

• While not illegial this practice is unethical, because the sale of imitation and fake art deprives the Aboriginal and Torres Strait Islanders of a profitable income stream. The fake art devalues and also disrespects the genuine articles made by Aborignal and Torres Strait Islander artists. 

• The Competition and Consumer Amendment (Exploitation of Indigenous Culture) Bill 2017 makes a range of amendments to the Competition and Consumer Act, which will prevent non-Indigenous Australians and foreigners from profiting from the sale of Indigenous art, souvenirs and other cultural items

7.8 factors influencing contemporary selling techniques 

• Technology - artificial intelligence, webpages, digital advertising, Mobile phone and SMS marketing, Location based marketing, Push notifications

• Social media - main disadvantage of SMA is that marketers do not have complete control over what online consumers write about the business. 

• Global Marketing - 

• Government regulation