Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic

Marketing: A

Global−Managerial

Approach, 14/e

14. Promotion −
    Introduction to Integrated
    Marketing
    Communications

Text © The McGraw−Hill

Companies, 2002

414 Chapter 14

During market introduction, the basic promotion objective is informing. If the

product is a really new idea, the promotion must build primary demand—demand for

the general product idea—not just for the company’s own brand. Video phone ser-

vice and electric cars are good examples of product concepts where primary demand

is just beginning to grow. There may be few potential innovators during the intro-

duction stage, and personal selling can help find them. Firms also need salespeople to

find good channel members and persuade them to carry the new product. Sales pro-

motion may be targeted at salespeople or channel members to get them interested in

selling the new product. And sales promotion may also encourage customers to try it.

In the market growth stage, more competitors enter the market, and promotion

emphasis shifts from building primary demand to stimulating selective demand—

demand for a company’s own brand. The main job is to persuade customers to buy,

and keep buying, the company’s product.

Now that more potential customers are trying and adopting the product, mass

selling may become more economical. But salespeople and personal selling must still

work in the channels—expanding the number of outlets and cementing relation-

ships with current channel members.

In the market maturity stage, even more competitors have entered the market.

Promotion becomes more persuasive. At this stage, mass selling and sales promotion

may dominate the promotion blends of consumer products firms. Business products

may require more aggressive personal selling—perhaps supplemented by more adver-

tising. The total dollars allocated to promotion may rise as competition increases.

If a firm already has high sales—relative to competitors—it may have a real

advantage in promotion at this stage. If, for example, Nabisco has twice the sales

for a certain type of cookie as Keebler, its smaller competitor, and they both spend

the same percentageof total sales on promotion, Nabisco will be spending twice as

much and will probably communicate to more people. Nabisco may get even more

than twice as much promotion because of economies of scale.

Firms that have strong brands can use reminder-type advertising at this stage. Sim-

ilarly, many firms turn to various types of frequent-buyer promotions or newsletters

targeted at current customers to strengthen the relationship and keep customers loyal.

This may be less costly and more effective than efforts to win customers away from

competitors.

These ads are not for individual
brands but rather were placed as
a cooperative effort by almond
growers in California and apple
producers in France to help build
primary demand for their
respective products.

Market introduction
stage—“this new idea
is good”

Market growth
stage—“our brand is
best”

Market maturity
stage—“our brand is
better, really”