Page 368 - Introduction to Business

342 PART 3 Marketing

media. Personal selling involves the use of a sales force to sell products and serv-
ices. Publicity refers to items about a company and its products or personnel that
appear in mass media. The advantages and disadvantages of each of these promo-
tion tools and the markets to which companies’ products and services are sold will
largely determine the role each element plays in the promotion mix.
Companies’ distribution mixes consist of decisions about channels of distri-
bution and logistics. Channels of distribution involve the use of such intermedi-
aries as wholesalers and retailers to market products and services to businesses
and consumers and governments. A major decision for companies is whether
they wish to use channels or bypass them and go direct to the end customer.
Companies that are using channels must decide on the specific types of whole-
salers and retailers to use and must develop a program for ensuring their cooper-
ation in pushing their products.
Logistics consist of materials management (the inward flow of unfinished
goods into a firm) and physical distribution (the outward flow of finished products
to customers). Logistics also involves decisions about transportation (pipelines,
water, rail, trucks, and air transportation), storage (types of warehouses, where to
locate them, operations), customer service levels, whether to outsource, and spe-
cial requirements for logistical operations within international markets.

The Promotion Mix

Companies promote their products and services for a variety of reasons. The major
one is to stimulate demand, that is, to generate revenues. Other reasons include
• Making customers aware of and getting them to try new products
• Encouraging repeat purchases
• Getting customers to increase their purchase levels
• Retaining customers
• Providing information
• Facilitating channel of distribution support
• Responding to competitors’ promotional efforts
promotion mix The configuration of A major responsibility for marketers is to put together a promotion mix. This
advertising, sales promotion, personal involves deciding how much emphasis to place on each promotion element—
selling, and publicity used to market
advertising, sales promotion, personal selling, and publicity—developing a budget
products and services
for each, and determining a promotion plan. To determine a promotion plan
requires deciding when a promotion effort will occur and coordinating it with other
parties involved, such as advertising agencies and media. There are four drivers
that undergird the design of a promotion mix.
• The strengths and weaknesses in terms of control, feedback, and cost of each
promotional alternative in relation to the objectives sought must be evaluated.
Control is the extent to which an organization can be sure that the promotion
effort has been carried out as planned. Feedback from the market concerns
the effectiveness of the promotion. Cost is generally determined as cost-per-
prospect reached.
• Different products and services require different promotion mixes. For
example, advertising is emphasized in the marketing of consumer products,
whereas personal selling predominates in the marketing of industrial goods.
• Promotion mixes need to be revised periodically to accommodate changes in
the market and the competition.
• Promotion decisions need to be made in an integrated manner.

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