Text 5.2. Read the text and discuss the difference between promotional strategies. Promotional Strategies

There are many different types of promotional strategies a company can implement. Marketing theory distinguishes between two main kinds of promotional strategy – ‘push’ and ‘pull’ or a combination of the two.

A ‘push’ promotional strategy is a promotional effort that persuades middlemen to sell a product aggressively. The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers.

A ‘push’ strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g. selling insurance or holidays directly). With this type of strategy, consumer promotions and advertising are the most likely promotional tools. Typical tactics employed in push strategy are: allowances, buy-back guarantees, free trials, contests, discounts, displays, and premiums. The slogan of this strategy is: “Taking the product to the customer.”

A ‘pull’ selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product. If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers. A good example of a pull is the heavy advertising and promotion of children’s toys – mainly on television. Typical tactics employed in pull strategy are: samples, coupons, cash refunds and rebates, premiums, advertising specialties, loyalty programs/patronage rewards, contests, sweepstakes, games, and point-of-purchase (POP) displays. The slogan of this strategy is: “Getting the customer to come to you.”

Car dealers often provide a good example of a combination strategy. If you pay attention to car dealers’ advertising, you will often hear them speak of cash-back offers and dealer incentives.

The clear difference between ‘push’ and ‘pull’ promotional strategies is that, ‘push’ promotes to trade/retail and ‘pull’ promotes to the consumer/customer. They both support each other but have clear separate objectives in relation to their primary target being consumer or trade.

As products move through the four stages of the product lifecycle different promotional strategies should be employed at these stages to ensure the healthy success and life of the product.

1. Introduction. When a product is new, the organization’s objective will be to inform the target audience of its entry. Television, radio, magazine, coupons, etc. may be used to push the product through the introduction stage of the lifecycle. ‘Push’ and ‘pull’ strategies will be used at this crucial stage.

2. Growth. As the product becomes accepted by the target market, the organization at this stage of the lifecycle works on the strategy of further increasing brand awareness to encourage loyalty.

3. Maturity. At this stage with increased competition the organizations take persuasive tactics to encourage the consumers to purchase their product over their rivals. Any differential advantage will be clearly communicated to the target audience to inform of their benefit over their competitors.

4. Decline. As the product reaches the decline stage, the organization will use the strategy of reminding people of the product to slow the inevitable.

One more promotional strategy is positioning. It focuses on specific market segments. Market research identifies the market segments that will most likely purchase a product; that product is then differentiated from the competition and promoted with the appropriate market image. Product differentiation is accomplished by distinguishing the characteristics of one product from another by such things as brand name, package, package design, capabilities, colour, logo, taste, and price.

Comprehension

1. Read text 5.1 again and answer the questions.

1. How do potential buyers get to know about a new product or service?

2. What is the purpose of promotion?

3. What helps organizations to survive on the market?

4. What makes a good selling of a product?

5. How can you explain a conception of marketing mix?

6. What tools does a promotional manager use in his work?

7. What makes effective promotional strategy?

2. Fill in the charts below.

3. Say if the following statements are true or false. Give arguments in favour of your opinion.

1) All promotional strategies can be divided into two main groups.

2) A ‘pull’ strategy uses aggressive methods of selling.

3) Samples and coupons are examples of ‘push’ tactics.

4) Promotional strategies vary during the lifecycle of a product.

5) Introducing a product, companies implement both strategies.

6) At the growth stage companies use the strategy of reminding people of the product.

7) Market segments are the aim of positioning.

8) Market image plays an important role in positioning.

4. Highlight the main points of each promotional strategy.

Language study

1. Give the Russian equivalents to the following word-combinations.

A legitimate tool, an attractively priced product, to develop brand awareness, to win appreciation, short-term incentives, a proper ratio of the components, to bypass other promotional strategies, buy-back guarantees, cash refunds and rebates, free trials, point-of-purchase displays.

2. Fill in the gaps with the word-combinations from the text.

1. Persuasion is … of promotion.

2. The purpose of promotion is to make the product known to its … .

3. The standard … consists of introduction, growth, maturity and decline.

4. The process of determining … is represented by price.

5. Companies can … two main kinds of … .

6. A ‘pull’ selling strategy is aimed at … .

7. The final purpose of increasing brand awareness is … to the product.

8. At maturity stage companies take … to stimulate consumers to buy their product.

3. Put in the missing prepositions.

1. People who deal … products, services, or ideas often use persuasion as a way of promotion.

2. The marketing mix consists … the four Ps.

3. Brand awareness is connected with promotion according … this conception.

4. Advertising persuades people to behave … respect … the products, ideas or services.

5. Many people usually buy … a company they think highly of.

6. To create a high demand … a product, manufacturers use different strategies.

7. Various promotional strategies are used … different stages of product lifecycle.

8. The task of any company is to persuade potential customers to buy their product … their rivals.

9. At the decline stage the strategy of reminding people … the product is very popular.

10. Positioning focuses … specific market segments.

READING II