You haven’t probably realized, but in many cases marketers simply and shallowly attach promotions to prices. It’s so erroneous and common that not a few people would define promotion as discount. But the topic evolved, and a lot. Promotion is one of the four original P’s of marketing (together with Price, Place (distribution) and Product). “Original” because more recently other P’s were added. It’s not the case for now.
The principle of promotion is reciprocation. It shouldn’t be dealt as a discount or price reduction only. It might be, but it’s not the only one. One might have different reasons to promote from purely commercial (please buy) to awareness (please notice) to a desired action (please do something). What they share in common is the fact that both sides will profit somehow.
Dumping is a way to show that price is a very delicate matter. This commonly seen as a dirty practice in the market dubbed as “The sale of a good in a foreign market for a lower price than in the domestic market or for a lower price than its cost of production” (http://www.google.ca/url?sa=X&start=3&oi=define&q=http://www.econ100.com/eu5e/open/glossary.html&usg=AFrqEzfKZDVMikcn5vXMXXw1DVsJIUYxPw). Some marketers truly believe this is the most efficient way to attract customers. In the end, they ignore or simply underpin an eventual financial loss. This is exceptionally cruel for small businesses which do not have enough leverage to keep up with such strategy.
Dealing with price when doing a promotion is not the most appropriated way to sell because consumers’ preferences changed a lot in the past 2 decades. It’s just too simplistic to think someone will buy your product just because it’s cheap. Also, it’s a bad compensation for your profit margins selling for lower than you can produce.
The amount of options a customer has now is amazingly powerful. One might be looking for price, but always remember that premium brands and upscale segments do not occur by chance. There are other people who don’t care about the tag, but the product itself is what counts. And that’s where creativity enters.
Promotion means advertising, letting people know you have a special deal for them. Advertising is not making a joke in national primetime or any other media. That’s what advertising agencies haven’t realized yet. Promotion should be the clearest and quickest way to advertise. Promotion, however, doesn’t start on communication. It’s a far broader strategy that should start on the very core of the marketing plan.
Creativity in promotion equals:
- Being simple
Just like above. The clearer you and your message are, the easier and quicker your audience will catch.
- Promising and delivering
What’s the purpose on promoting something you cannot comply with?
The principle of promotion is reciprocation. It shouldn’t be dealt as a discount or price reduction only. It might be, but it’s not the only one. One might have different reasons to promote from purely commercial (please buy) to awareness (please notice) to a desired action (please do something). What they share in common is the fact that both sides will profit somehow.
Dumping is a way to show that price is a very delicate matter. This commonly seen as a dirty practice in the market dubbed as “The sale of a good in a foreign market for a lower price than in the domestic market or for a lower price than its cost of production” (http://www.google.ca/url?sa=X&start=3&oi=define&q=http://www.econ100.com/eu5e/open/glossary.html&usg=AFrqEzfKZDVMikcn5vXMXXw1DVsJIUYxPw). Some marketers truly believe this is the most efficient way to attract customers. In the end, they ignore or simply underpin an eventual financial loss. This is exceptionally cruel for small businesses which do not have enough leverage to keep up with such strategy.
Dealing with price when doing a promotion is not the most appropriated way to sell because consumers’ preferences changed a lot in the past 2 decades. It’s just too simplistic to think someone will buy your product just because it’s cheap. Also, it’s a bad compensation for your profit margins selling for lower than you can produce.
The amount of options a customer has now is amazingly powerful. One might be looking for price, but always remember that premium brands and upscale segments do not occur by chance. There are other people who don’t care about the tag, but the product itself is what counts. And that’s where creativity enters.
Promotion means advertising, letting people know you have a special deal for them. Advertising is not making a joke in national primetime or any other media. That’s what advertising agencies haven’t realized yet. Promotion should be the clearest and quickest way to advertise. Promotion, however, doesn’t start on communication. It’s a far broader strategy that should start on the very core of the marketing plan.
Creativity in promotion equals:
- Being simple
Just like above. The clearer you and your message are, the easier and quicker your audience will catch.
- Promising and delivering
What’s the purpose on promoting something you cannot comply with?
- Avoiding “situations” (too many conditions, misleading messages etc)
Nobody wants or can read almost invisible terms and conditions
- Adding value to your existing product needs to be tangible
Even commodities offer lots of options these days.
- Knowing your target
This was the first advice when I went to a local small business advice center. If you have someone who’s willing to listen, your task becomes easier.
- Leaving the price alone as long as you can
Try indirect benefits like parts, accessories, coupons, gifts certificates, vouchers, extra prizes etc
- Think outside the profit.
Selling is important, but selling once can become a complication in the future. Loyal people are cheaper and more profitable to keep than investing in new acquisitions. Have a back-up plan to satisfy those people who purchased once from you.
Dell is an example that combines very well all these topics. Have you realized how subtle and effective they are with their promotions? They’re frequent (almost every day there’s something going on), there’s a clear added value to their products (like “free” upgrades, free accessories and peripherals, shipping included etc). We’re not talking about selling shoes or two boxes of strawberries for the price of one, but a 700 dollar computer (to mention the cheapest ones).
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