4.01 B Reading & Activities - Buncombe County Schools

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Directions:

Read & highlight

the following inf
ormation.
When you see an

Activity,


complete it on a
separate sheet of paper
(separate page for each activity


LABEL EACH PAGE AT THE TOP WITH
THE ACTIVITY NUMBER). Hang on to these activity pages as you go, staple them in numerical
order, &
turn in when
ALL

are complete.


Performance Element

4.01 Acquire a foundational knowledge

of promotion to understand its nature and scope.


Performance Indicator

B
. Explain the types of promotion


A. Define the following terms: product promotion, primary
product promotion, secondary
product promotion, institutional promotion, public service,
public relations, and
patronage.




Product promotion
:

A promotional method used by businesses to convince prospects to select
their goods and services instead of a competitor’s brand.



Primary product promotion
:

Emphasis is on the product and its uses,

and not on a
particular brand. Primary product promotion aims to stimulate demand or consumer desire
for an entire class of goods and services.

Competition is between the two different
industries. This type promotion useful when introducing a new conce
pt or a totally new
product. Ex. Coke vs. Pepsi



Secondary product promotion
:

Also known as selective product promotion. Secondary
product promotion is used to stimulate the demand for a specific brand of a product. Used
to compete against other makers
of the same type of product. Ex. Coke Zero vs. Pepsi
Max


Institutional promotion (corporate promotion):

In Institutional advertising the company is the focus
of the promotion instead of any products it sells.
Institutional promotion
is concerned with the
reputation of the store, with style leadership, quality

merchandise and services.
Organizations
promote concepts, ideas or philosophies that they want consumers to associate with their
brands.

Ex. Scotties Tissues plants three trees for every one tree used emphasizing how
important the environment is to the company.

Note: Institutional advertising tends to be expensive because it doesn't rely on immediate
spending from the consumer. It also forces the organization to be accountable for its promises. If
the organization fails to live up to the image it has created in
the promotions it will lose brand
loyalists to its competitors.

Public service:

Public service

advertising is designed to inform the
public

on issues that are
frequently considered to be in the general best interests of the community at large. Typically,
it
reflects a political viewpoint, philosophical theory, religious concept or humanitarian notion. It is
also commonly referred to as a
public service announcement

(
PSA
) or a community
service

announcement (CSA). The ads are usually broadcast on radio or t
elevision, but may also appear
in newspapers or magazines. They are prevalent in industrialized countries throughout the world.

PSAs are commonly aimed at altering
public

attitudes by raising consciousness about particular
issues. Health, conservation and
safety themes are prevalent in many PSAs. The
public service

advertising campaigns are often sponsored by trade associations, civic organizations, non
-
profit
institutions or religious groups. The U.S. military, in addition to paid advertising, regularly
pr
oduces PSAs as part of their recruitment efforts.

Some PSA ads use celebrity spokespersons to garner attention. Others attempt to appeal to the
masses through portraying risks and issues relevant to ordinary men, women and children. A
common misconception
about
public service

advertising is that it includes political campaign ads,
which are actually privately funded.

Public relations
:
Public relations provide a service for the company by helping to give the public
and the media a better understanding of how

the company works. Within a company, public
relations can also come under the title of
public information

or
customer relations
. These
departments assist customers if they have any problems with the company. They are usually the
most helpful departments, as they exist to show the company at their best.
Ex.
Google Inc.
placed a link on the Google.com homepage that provided ways to

support the disaster relief in
Haiti, including a prominent call to donate to UNICEF through Google Checkout

People often have the perception of
public relations

as a group of people who spin everything.
Spin

can mean to turn around a bad situation to the

company’s advantage. It is true that part of
the purpose of
public relations

is to show the company in a
positive light no matter what.

Patronage
:
Continued support, loyalty and repeat business of customers. Customers (patrons)
remain loyal to a busines
s or company because they are satisfied with the company and trust
and/or confidence has been established through past experiences. It is because of patronizing
that makes it easy for a company to sell its products.



Activity

1

Locate
one example each

of inst
itutional and product promotion

in magazi
nes
or on the Internet
. Affix
the promotions to paper

and label each by its type of promotion.
Explain why you believe it is
institutional or product promotion.



Activity 2

Create a list of different exampl
es of institutional and product promotions
(2 of each)
that you could
use to promote a business you would be interested in opening.




B.

Identify types of product promotion.

(Refer to section A)



Primary



Secondary



Activity 3

Locate
one example each

of
primary and secondary product promotion

in
a
magazi
ne. Affix the
promotions to paper

and label each by its type of promotion.
Explain why you believe it is primary or
secondary product promotion. Definitions and examples were given in section A.


C.

Descr
ibe the uses of product promotion.

1.

Creates consumer awareness of a good or service

2.

Informs customers about product features

3.

Encourages interest in and inquiries about a good or service

4.

Informs consumers where a product can be purchased

5.

Builds a reputation
for a product

6.

Creates excitement and motivates retailers and salespeople





Activity 4

Make a sketch of a newspaper ad (about 3” x 3”) for a local business that does one of the following
listed above under sections C

(1


6)
. Then, explain how it does it
(1
-
6)
by using the following

statement
: “The above newspaper ad creates consumer awareness of

______________

(name of
business) by
________________________________
(explanation).”


D.

Identify types of institutional promotio
n.


There are three kinds of institutional promotion

public service, public relations, and patronage.


1.

Public service

-
Public
-
service promotions

inform customers about non
-
controversial issues

that
are in the public’s best interest. Many times, companies s
ponsor public
-
service
announcements on local television stations, highlighting issues such as community drug
prevention or after
-
school participation in sports or arts programs. Public
-
service promotions
build goodwill for the company, especially when they

depict the company as a friend of the
community.

Ex .I
nsurance companies sometimes promote improved health through changes in
dietary and exercise habits.


2.

Public relations

-

Public
-
relations promotions are created to deal with issues that are in the
public’s interest but are also related to the company or its products. These promotional
activities may be either proactive (the business takes the initiative to promote itself) or reactive
(the business engages in the activities in response to an external

situation, such as a lawsuit).
They are used to influence company’s image directly, such as improving a negative image or
establishing a positive one before negative feelings ari
se. Ex. After the oil spill in the Gulf of
Mexico, BP used their own employe
es that lived in the Gulf area to reinforce the fact that the
area is safe, food is safe, and efforts to clean up are successful.


3.

Patronage

-

Designed to get the customers coming back to the company, therefore, patronage
promotion promotes a firm’s presti
ge or the firm features.

Ex. Pet Smart offers a Pet Perks
loyalty card.


E.

Describe uses of institutional promotion.





Change a particular attitude toward a firm or its products: In recent years, the tobacco industry
has come under fire for promoting its

products, which are associated with various form of disease.
In an effort to clean up this negative image, tobacco companies such as Philip Morris have been
engaging in institutional promotions such as its Quit

Assist

program and resources for helping
smo
kers kick the habit.



Inform customers of the company’s interest in social or environmental issues: Corporate giant IBM
has a long
-
standing commitment to environmental leadership in the business world. The company
has a written environmental
-
affairs policy
and participates in many voluntary initiatives, such as
membership in the Wildlife Habitat Council.



Inform the public about the company’s future: When wireless communication provider Verizon
bought Alltel in 2009, the company engaged in a promotional campa
ign to let its customers and
the general public know about the change.



Inform customers of the company’s name and its type of business: During the rise in the
popularity of the Internet, many online travel agencies such as Expedia and Travelocity were born
,
and then they began promotions to let the public know about their services.



Show the company’s commitment to quality, technology, or research: The world’s largest
research
-
based pharmaceutical company, Pfizer, uses institutional promotion to demonstrate
to
the public its commitment to using research to help people live longer, healthier, happier lives.



Enhance company morale and recruit new

employees:

Battelle, a global science and technology
corporation, holds many recruiting events and initiatives all o
ver the country.



Build or reinforce a favorable company image: Coca
-
Cola’s $5 million donation of bottled water
and other beverages to hurricane
-
ravaged New Orleans in 2005 is one example of institutional
promotion meant to help build

a highly favorable co
mpany image.


F.

Discuss the advantages of promotional activities.


Promotion is an important part of the marketing mix that communicates information about goods,
services, images, or ideas to customers. Promotion can accomplish a number of
objectives

building
awareness, increasing demand, differentiating a product from its competitors, highlighting a product’s
value, and changing or reinforcing customer attitudes
.


There are several advantages of promotional activities.



They contribute to ec
onom
ic growth and business activity.



They support the mass communication media.



Companies benefit directly because these activities

create awareness of the company and its
products.



Customers benefit because these activities raise our

standard of living an
d make us better
educated customers who are able to make more intelligent purchases.



Create jobs due to the need to mass produce products based on customer demand.



Encourages consumers to purchase and use new and improved products


Activity 5

Read the following article on the
10 Most Successful Advertising Campaigns of All Time
. (Hold down
control key and click.) Explain what advantage(s) from the list above that eac
h advertising campaign
reached and explain why you think that.


G.

Discuss the disadvantages of promotional activities.


There can be

many disadvantages of promotion as well.



They can be deceptive, manipulative, and play on

consumers’ fears.



They can be
offensive and reinforce

stereotypes.



They have limited abilities.

1.

Product promotion does not add value to goods and services.

2.

Institutional promotion can be costly and difficult to measure.

3.

Promotion cannot make up for poor quality products

4.

Promotion
cannot substitute for well
-
trained sales staff/sales
person

5.

Promotion cannot achieve major success

Activity 6

Every company engages in some type of promotional activity, and alcohol companies are no
exception. Their promotional activities are often contro
versial, especially when it comes to
advertising. Most people agree that advertising affects everyone on a daily basis, whether they
realize it or not. And this includes impressionable young children and adolescents. Many people
think it is unethical for a
lcohol companies to advertise their products when it can influence young
people. Some critics even claim that many of these ads are actually
targeted
toward this specific audience. Often, these
ads portray drinkers as “cool,” active, happy people when, in
reality, the habit does not contribute to this type of lifestyle.
As a matter of fact, it may contribute to just the opposite

addiction, depression, and even death. Alcohol companies
maintain, however, that there is nothing unethical about their advertisin
g practices. There are legal ages for purchasing
alcohol and warnings on product packaging. They even offer resources for parents to talk to their children about not
drinking. Beyond that, they shouldn’t be held responsible. What do you think? Is it unethi
cal for alcohol companies to
advertise their products when children might be affected?