Promotional Mix and Product Life Cycle
Product Life Cycle
Introductory Phase
The new product is barely known, and initial sales are low. Thus, companies are investing heavily in advertising, leading to increased costs and a more expensive product. The company can experience challenges in this phase.
Growth Phase
If the product is successful, sales increase rapidly. Other competitors begin to produce it, and its supply increases. At this stage, firms try to differentiate their products from those of competitors to increase their sales. The use of the good or service becomes widespread among consumers.
Maturity Phase
When a product is in its mature phase, most potential customers already possess it, and demand stagnates. Companies, faced with weak demand, try to reduce costs to maintain profit margins.
Decay or Decline Phase
The product is nearing its end. The demand is reduced, and cheaper companies will still remain in the store and focus on the creation of other substitute goods or different ones. Finally, the product is withdrawn from the market.
Promotional Mix
The promotional mix is used to communicate, inform, and persuade customers and other stakeholders about the company, its products, and offers to achieve organizational objectives.
It is the set of communication tools and variables used by organizations to communicate with their markets, pursuing their own purposes. The choice and use of these tools should be consistent with these goals and with each other to achieve synergies.
Sales Promotion
Sales promotion is a tool or variable of the promotional mix (business communication). It consists of short-term incentives offered to consumers, members of the distribution channel, or sales teams to increase the purchase or sale of a product or service.
Objectives of Sales Promotion
The goals are generally associated with short-term outcomes (sales), not permanent results. The objectives of sales promotion include:
- Increase sales in the short term
- Helping to increase market share
Sales Force
The sales force is essential to reach potential customers and convert them into actual customers.
Description
The sales force of an enterprise is the set of resources (human or material) working directly or closely connected with its work. The discipline of management responsible for managing these resources is sales management. Therefore, sales management is committed to strategically defining the role and objectives of the sales force, creating and implementing the sales plan. It is responsible for selecting, training, remunerating, motivating, and controlling a team of people and adopting the necessary measures to achieve the renewal of the goal.
Advertising
Advertising is a technique for spreading or informing the public about a good or service through the media to motivate the public into consumer action. It is broadly grouped into ATL (Above the Line) and BTL (Below the Line).
Advertising reaches the public through the media. These media broadcast ads in exchange for payment previously determined in a purchase and sale contract between the advertising agency and the environment, emitting the advertisement within a schedule.
Public Relations (PR)
Public relations (PR) is the discipline responsible for managing communication between an organization and its key audiences to build, manage, and maintain its positive image. It is a discipline that is deliberately planned and carried out strategically.
It has the characteristic of being a form of two-way communication, as it not only addresses its audience (both internal and external) but also listens and responds to their needs, thus fostering mutual understanding and allowing it to be used as a powerful competitive advantage when positioning a claim.
Direct Marketing
Direct marketing is an interactive system that uses one or more media to obtain a measurable response from a target audience.
The most common form of direct marketing is direct mail, where marketers send their messages to consumers in a particular area, usually drawn from a database. A variety of mailings would constitute the introduction of brochures and other advertising elements directly into the mailboxes of buildings. The second most common method of direct marketing is telemarketing, by which companies call phone numbers that have been previously selected or randomly chosen.
Direct marketing differs from usual advertising methods that do not use an intermediate media or are discussed in public, for example, at the point of sale. On the contrary, it is sent directly to the consumer. Some of the advantages of direct marketing are:
- It is a fast and economical method of reaching consumers.
- Theoretically, it goes directly to potential customers of a product or service, so its effectiveness is greater than other mass media.
Most direct marketing is done by companies whose sole function is to design and implement this type of advertising. Generally, they use consumer databases and often handle very sophisticated criteria to include or remove them from their marketing lists.