What Is Promotion Mix?

– Elements & Examples

In business, just developing a product isn’t enough to achieve the marketing goals. This is why
the marketing mix includes an important element of the promotion mix.

Promotion involves activities that help a business communicate the offering and its features to
the customer and generate their interest in the desired action. Numerous activities can be
considered a promotion. While some market the offering to the customer organically, some
involve paid media or paid communication. All these activities combined form the promotion mix.

What Is Promotion Mix?

Promotion mix is the set of all the promotional variables a business use to create, maintain and
increase the demand for its brands or offerings.

This definition of promotion mix can be understood better by dividing it into two parts

 Set of all promotional variables: The promotion mix combines all the tools,
strategies, and approaches a business uses to get its message to the target
market.
 Create, maintain, and increase the demand: The main objective of developing a
promotion mix is to make the target audience aware of the offering and influence
them to purchase the business’s offering using promotional variables.
Promotion is the fourth element of the 4 Ps of the marketing mix that focuses on communicating
the brand and the offering to the target customer and influencing their purchase decision.

In simple terms, it constitutes all those activities undertaken by a business to generate the
interest of its customers in buying the product or service offered.

The Importance Of Promotion Mix

The marketing mix stands on 4Ps for a reason. Once the product is ready and its price and
distribution channels are decided, the business needs to inform the target audience about its
existence. This is where the promotion mix comes in.
It helps the business develop and share the right communication message to the right audience
using the right channel.

While other marketing mix elements ensure that the product is developed according to the
customer’s needs, requirements, and buying capacity; the promotion mix effectively informs the
customers that such an offering exists and gives them reasons to purchase the same.

Even the perfect product, pricing, and place strategy can go waste if the promotion mix isn’t
properly configured by the business.

Promotion Mix Elements

A brand or offering is usually promoted using three mediums –

 Owned Media: It refers to using business-owned channels to promote the brand

or offering. For example, using the company’s website, social media profiles, or
emails to communicate brand offerings to the target audience.
 Paid Media: It involves using paid channels like advertising, influencer marketing,
etc. to promote a brand offering.
 Earned Media: It is the promotion third parties like news channels, media houses,
customers, influencers etc., do voluntarily without getting paid for it.
The promotion mix combines this owned, earned, and paid media into five basic elements.
These components of the promotion mix are:

 Advertising
 Public Relations
 Personal Selling
 Sales Promotion
 Direct Marketing
Advertising

Advertising is a paid promotion method where a sponsor calls for public attention through paid
announcements.

This promotional mix component uses paid media channels like TV, radio, newspaper,
billboards, or even digital advertising channels like social media platforms and search engines.

Advertisements have the following characteristics:

 Paid form of promotion.

 Focuses on one-way communication from brand to customer.
 Can be personal or non-personal, depending on the channel used.
 Have a mass reach.
Public Relations

Public relations involves communicating to the target audience and getting their attention using
earned media channels like news, word of mouth, government announcements, etc.
Simply, public relations is a strategised process of releasing organisation-related information to
the public using trustable channels like news to maintain a favourable reputation of the brand.

Public relations involve:

Trustable sources,
Brand mission oriented communication messages, and
Two-way communication, as the brand releases the message and waits for the
public response to strategically release another set of messages.
Sales Promotion

Sales promotion is the offering’s promotion using attractive short-term incentives to stimulate
demand and increase sales.

The short-term incentives are often used to –

 Promote new products in the market

 Promote unsold inventory
 Attract more customers
 Lift sale temporarily
These incentives include but are not limited to –

 Seasonal discounts,
 Financial schemes,
 Target-based benefits for retailers, wholesalers, resellers, and affiliates
 Free samples,
 Exchange schemes
 Shipping schemes
 Bulk purchase discounts,
 Trade deals, etc.
Personal Selling

Personal selling is a personalised promotion that involves person-to-person interaction between

a brand representative and a prospective customer.

It involves personalised conversations and promotion presentations by the salesperson

developed after understanding the needs and wants of the target customer they promote to.

Unlike advertising, personal selling develops a personal connection between the brand
representative and the customer and involves more costs per person reached.

Personal selling is:

 Two-way personal communication between the brand representative and the

target customer,
 Dependent on the influencing and persuasion skills of the salesperson,
 Highly flexible way of promotion, and
  Focused on educating the customer more about the product and giving them
personalised reasons to buy.
Direct Marketing

Direct marketing is a promotion strategy where the target customers are contacted directly by
the brand instead of having an indirect medium like a retailer or wholesaler.

It’s a great promotional tool that helps the brand communicate directly with the prospective
customers through channels like –

 Door-to-door promotion,
 Promotional telephone calls,
 SMS, Emails, IM promotional messages,
 Targeted advertisements, etc.
But direct marketing is different from personal selling. Even though it involves direct contact
between the brand and the customer, it not often involves highly personalised sales pitches.

The Effect Of Digital Marketing On Promotion Mix

With the advancement in technology, the internet has made the world smaller. The impact of the
internet in today’s promotion mix is enormous. But this doesn’t mean that the promotion mix
elements have changed. The internet has just made the channels more efficient and effective.

Advertisements have become more personalized as they now use data for targeting.

Direct marketing doesn’t always involve a human connection now. Customers are just an SMS
or WhatsApp text away. The same can be done using bots.

PR campaign responses are faster now, and the business can plan and release information
through many more channels.

Personal selling has found a new channel on social media platforms like LinkedIn.

Sales promotion is now more dynamic and personalized. Different customers can now get
different offers based on their behavior, intent, and online activities.

Even direct marketing has expanded its horizon and now uses search engines and social media
platforms for better reach.

Factors Affecting Promotion Mix

Many businesses make the mistake of assuming that they should focus on one kind of
promotion mix. This is not always true. Different kinds of promotions will work best for different
businesses.
The elements of a successful promotion mix depend on the nature of the business, its goals and
objectives, the budget, and the competition in the market. Here are five key factors that affect
the promotion mix of a business.

Nature of product: Different types of products require different types of

promotion. Industrial products that are complex and technical rely more on
personal selling as they require a human to explain things better. On the other
hand, consumer products are often promoted using advertisements, sales
promotion, etc.
 Product lifecycle stage: Promotion mix also depends on the product’s lifecycle
stage. If the product is just launched, a good mix of PR, advertising, and direct
marketing could be used to get the word out and make the target market aware of
the product. An established product, however, may require only a few ads and
sales promotion campaigns.
 Nature of market: The size and nature of the market also influence the choice of
the promotion mix. A brand operating in a small market may benefit from personal
selling and direct marketing more than advertisements. However, a brand serving
a vast market may require a good advertising and PR strategy.
 Competition: The existence of competition and the promotional tools competitors
use greatly influence the business’s promotion mix. Suppose the competitor uses
sales promotion to promote its offering at the point of sale. In that case, the
business is bound to use a similar strategy to stop the competitor from poaching
its customers.
 Nature of customer: Customers’ demographics, behaviour, geography, etc., also
affect the type of promotion that would be most effective. Generation Z will
respond more to personalised ads than boomers. Millennials tend to respond to a
different promotional mix altogether. Similarly, promoting a technical product to
a customer belonging to a village will require more personal selling efforts than
advertisements.
 Budget: A business’s budget also plays an important role in determining the kind
of promotion mix it should use. If the business has a limited budget, it should use
the cheapest tool to yield maximum results. However, businesses with a lot of
money can afford to experiment with different tools and tactics.
Promotion Mix Examples

Let us see how some businesses use these tools to achieve their marketing goals. Take a look
at the following hypothetical example:

A business produces a high-tech gadget that lets people listen to music without using
headphones. It runs ads and direct response (DR) campaigns to generate interest from the
customers. Then, it uses personal selling to close the sale and make the target market aware of
its existence. This is a good example of how a personal selling campaign could work.

For this particular example, we have made some assumptions. We have assumed that the
business is selling a unique product, there is no existing competition, the customer is tech-
savvy, and the customer has a high purchasing power. Based on these assumptions, we have
identified five key factors that affect the promotion mix of the business.
A real-life example of an effective promotion mix is that of Coca-Cola.

The company uses a different promotion mix for every market it operates in. Usually, it’s a mix
of:

 Advertising: The company partners with celebrities and influencers and

advertises its brand on TVs, billboards, radios, etc.
 Sales promotion: It often releases sales promotion campaigns during festive
seasons.
 Public relations: The company keeps a check on its positive brand image using
public relations, where it tries to tackle the problem of environmental pollution by
its plastic bottles. The company effectively use earned media to showcase its
recycling program to the public and important stakeholders.
 Since Coca-Cola is an FMCG brand, it rarely uses direct marketing and personal
selling.

EXTENDED 3 P’s of Marketing mix

In the late 70’s it was widely acknowledged by Marketers that the Marketing Mix should be
updated. This led to the creation of the Extended Marketing Mix in 1981 by Booms & Bitner
which added 3 new elements to the 4 P’s Principle. This now allowed the extended Marketing
Mix to include products that are services and not just physical things.
 The extended 7 P’s:

 People – All companies are reliant on the people who run them from front line Sales staff
to the Managing Director. Having the right people is essential because they are as much
a part of your business offering as the products/services you are offering.

 Processes –The delivery of your service is usually done with the customer present so
how the service is delivered is once again part of what the consumer is paying for.

 Physical Evidence – Almost all services include some physical elements even if the bulk
of what the consumer is paying for is intangible. For example a hair salon would provide
their client with a completed hairdo and an insurance company would give their
customers some form of printed material. Even if the material is not physically printed (in
the case of PDF’s) they are still receiving a “physical product” by this definition.

Though in place since the 1980’s the 7 P’s are still widely taught due to their fundamental logic
being sound in the marketing environment and marketers abilities to adapt the Marketing Mix to
include changes in communications such as social media, updates in the places which you can
sell a product/service or customers expectations in a constantly changing commercial
environment.

The extended marketing mix describes three more P's added to the original four. People,
processes, and physical services make room for services marketing and round out a complete
marketing mix method. Marketers can use the extended marketing mix to flesh out a structure if
their business sells a service instead of a physical product.

 People — Describes the people behind the company. No matter the role, the people
working with the product are as essential as customers. They advocate for the company
and communicate the business' value to their customers.

Example: The baristas at my local coffee shop create an exceptional customer experience. Of
course, the lattes are good, but my favorite barista greets me by name and knows my order, and
that ultimately keeps me coming back. A company is only as good as the people behind the
scenes.
  Processes — Identifies how you will meet customer expectations. Outline what you will
do to deliver a fantastic consumer experience every time. Consider creating standard
operating procedures (SOPs) to solidify processes.

Example: Let's revisit the coffee shop scenario. Baristas have a recipe to follow when making
various drinks that make sure the customer gets their order the way they expect.

 Physical Evidence — Notes the physical elements needed to complete the mix. Even if a
company provides services, there are physical aspects that companies use to delight
customers and set themselves apart from competitors, like promotional materials.

Example: The coffee shop in a neighborhood thrives and defines itself with being a local
business among the mass of coffee chains in my area. Everything is local — the beans, the
mugs, and the decor comes from the Boston area — and that's how it's different from a massive
chain.

The extended mix, like the original, works with the rest of the mix.

First, let's talk about how the three Ps can intertwine. People at your company have to follow
the processes set in place, using physical evidence. We can also say the processes set in place
define the role of people and physical evidence.
If we look at the both mixes, we see the same. Companies need the right people to
execute promotion of the product or service. To put the connection between the mixes in a
different way, the extended mix is a customer-facing toolkit for enhancing the marketing mix.
The extended marketing mix helps companies define their marketing strategy in a well-rounded
system. Identifying each portion of the mix gets you one step closer to a functional,
complete marketing plan.

Consider using the extended marketing mix to help you make business decisions that sets your
company apart from competitors. For instance, fleshing out the tools needed for promotion
involves coming up with an individualized marketing campaign audiences love.

Marketing mixes are considered a foundational part of any organization. If you are just starting
to define a business plan, use this strategy to help with budgeting for marketing. The different
elements of the mix helps figure out costs.
Every pillar, especially price and promotion, help you determine where to allocate your budget.
For example, you have to determine a fair price for your product, and finalize how much you're
willing to put towards other factors, such as promotion and physical evidence.

Now that you know a little more about the extended marketing mix, are you going to use it to
figure out your next campaign's expenses? Remember, this strategy isn't just for start-ups. If
you're struggling to define a successful strategy, identifying these pillars can be a helpful
organizational tool.
BRAND
In the book Principles of Marketing (Philip Kotler/Gary Amstrong) a brand is defined as a "name,
term, sign symbol (or a combination of these) that identifies the maker or seller of the
product
Brand Name -part of a brand that can be spoken, including letters, words, and numbers.
Brand Mark- the elements of a brand that cannot be spoken.
Brand Equity- refers to the value of company and brands name(a brand that has high
awareness, perceived quality and brand loyalty)
Global brand-refers to a brand that obtains at least a third of its earnings from outside its home
country, is recognizable outside its home base of customers, and has publicly available
marketing and financial data.
Brand loyalty- a consistent preference for one brand over all others, is quite high in some
product categories.

Four Key Branding Decisions

Brand Sponsorship Decisions

Branding decisions go beyond deciding upon brand positioning and brand name. The third of
our four branding decisions is the brand sponsorship. A manufacturer has four brand
sponsorship options.

Brandin
g Decisions – Brand Sponsorship Options
A product may be launched as a manufacturer’s brand. This is also called national brand.
Examples include Kellogg selling its output under the own brand name (Kellog’s Frosties, for
instance) or Sony (Sony Bravia HDTV).
The manufacturer could also sell to resellers who give the product a private brand. This is also
called a store brand, a distributor brand or an own-label. Recent tougher economic times have
created a real store-brand boom. As consumers become more price-conscious, they also
become less brand-conscious, and are willing to choose private brands instead of established
and often more expensive manufacturer’s brands.
Also, manufacturers can choose licensed brands. Instead of spending millions to create own
brand names, some companies license names or symbols previously created by other
manufacturers. This can also involve names of well-known celebrities or characters from
popular movies and books. For a fee, they can provide an instant and proven brand name. For
example, sellers of children’s products often attach character names to clothing, toys and so on.
These licensed character names include Disney, Star Wars, Hello Kitty and many more.
Finally, two companies can join forces and co-brand a product. Co-branding is the practice of
using the established brand names of two different companies on the same product. This can
offer many advantages, such as the fact that the combined brands create broader consumer
appeal and larger brand equity. For instance, Nestlé uses co-branding for its Nespresso coffee
machines, which carry the brand names of well-known kitchen equipment manufacturers such
as Krups, DeLonghi and Siemens.
Brand Development Decisions
Branding decisions finally include brand development. For developing brands, a company has
four choices: line extensions, brand extensions, multigrades or new brands.

Branding
Decisions – Brand Development Options
Line extension refers to extending an existing brand name to new forms, sizes, colors,
ingredients or flavors of an existing product category. This is a low-cost, low-risk way to
introduce new products. However, there are the risks that the brand name becomes
overextended and loses its specific meaning. This may confuse consumers. An example for line
extension is when Coca-Cola introduces a new flavor, such as diet cola with vanilla, under the
existing brand name.
Brand extension also assumes an existing brand name, but combines it with a new product
category. Thus, an existing brand name is extended to a new product category. This gives the
new product instant recognition and faster acceptance and can save substantial advertising
costs for establishing a new brand. However, the risk that the extension may confuse the image
of the main brand should be kept in mind. Also, if the extension fails, it may harm consumer
attitudes toward other products carrying the same brand name. For this reason, a brand
extension such as Heinz pet food cannot survive. But other brand extensions work well. For
instance, Kellog’s has extended its Special K healthy breakfast cereal brand into a complete line
of cereals plus a line of biscuits, snacks and nutrition bars.
Multibrands means marketing many different brands in a given product category. P&G (Procter
& Gamble) and Unilever are the best examples for this. In the USA, P&G sells six brands of
laundry detergent, five brands of shampoo and four brands of dishwashing detergent. Why?
Multibranding offers a way to establish distinct features that appeal to different customer
segments. Thereby, the company can capture a larger market share. However, each brand
might obtain only a very small market share and none may be very profitable.
New brands are needed when the power of existing brand names is waning. Also, a new brand
name is appropriate when the company enters a new product category for which none of its
current brand names are appropriate.
As you might have recognized, these four branding decisions are all interrelated. In order to
build strong brands, brand positioning, brand name, brand sponsorship and brand development
have to be in line with each other.