Discuss the role of marketing in Canadian business.

Donna Thiessen

8 Discuss the role of marketing in Canadian business.

Marketing plays an essential role in Canadian businesses, acting as a vital bridge connecting organizations with their customers. Effective marketing not only helps businesses understand consumer needs and preferences but also enables them to create value-driven strategies to compete successfully in diverse and dynamic markets. In this module, we will explore the foundational concepts of marketing, including its functions and guiding principles. You’ll gain insights into crafting effective marketing strategies, harnessing the power of market research and information systems, and navigating the complex marketing environment. Additionally, we’ll examine how businesses strategically combine product, price, place, and promotion—collectively known as the marketing mix—to achieve their goals. Ultimately, this learning outcome culminates in integrating marketing principles into a cohesive business plan that addresses real-world challenges faced by Canadian enterprises.

INSTRUCTORS: Share this video (or one of your choosing) showcasing the power of marketing with students in the News section the day before LO8 begins: https://youtu.be/cT0d-ISXH5Q from Mad Men. Feel free to substitute with a video that best fits your teaching style.

8.1 Define marketing, its functions, and the marketing concept.

Understanding Marketing: The Exchange of Goods, Services, and Ideas

Marketing is a series of actions that facilitate the exchange of goods, services, and ideas. For simplicity, we will refer to these as “products.” It is this very exchange that drives our economies. Consumers are able to satisfy their unlimited wants, while businesses can achieve their goals by providing products that satisfy those consumer needs. Marketing plays a pivotal role in this process by identifying which products consumers will demand at specific prices. In Learning Outcome 1, you explored key economic concepts like demand, supply, and competition. These theories are not just academic; they form the core of a marketer’s strategy.

Shaping Demand: Marketers figure out how to position their product so that consumers are willing to pay more for it than they would for comparable options. This is especially relevant in monopolistic competition, where marketing helps shift the demand curve to the right, making it more inelastic—meaning consumers will demand more at each price and are less sensitive to price changes.

Distribution: Marketing then works out the best way to ensure that products reach consumers, ensuring availability at the right time and place.

This series of actions represents the well-known “4 Ps of Marketing”, which we will explore in greater detail shortly.

The Role of Marketing

Marketing often faces criticism, with some claiming it manipulates people into buying things they don’t need. While it’s true that consumers may not necessarily “need” many marketed products, they certainly desire them. And, in the realm of economics, fulfilling unlimited wants with scarce resources is what drives consumer behavior. Consumers are, after all, the “masters of their own destiny”—the consumer is “KING.” Marketing doesn’t force consumers into purchases; it simply encourages them to choose.

The Art and Science of Marketing

Marketing is more of an art than a science compared to other business functions. It’s subjective, often difficult to master, and involves creativity alongside discipline. There are no hard and fast rules, largely because marketing involves human behavior—something that can often be unpredictable and messy.

The Marketing Concept

At its core, the marketing concept is simple: Figure out what people want and meet your business’s goals by selling it to them.

Key points include: Constantly monitor changing consumer tastes. The best marketers anticipate what consumers want before the consumers even realize it. With increased competition, only those businesses who can convince consumers that their product is superior will thrive. This is the essence of marketing. A great example of this marketing mindset is Apple. The company’s approach to marketing, particularly under Steve Jobs, exemplifies the marketing concept. Jobs, often seen as a marketing visionary, transformed Apple’s product strategy and marketing campaigns to meet consumer needs in innovative ways.

The Evolution of Marketing

Marketing, more than any other business function, is constantly evolving. Increased global competition has accelerated this change, but the evolution of marketing has been ongoing for well over a century, since the Industrial Revolution. The marketing concept has adapted in response to changing business environments, and we can break this evolution down into four key periods:

Production Orientation Period (Pre-1930s): Businesses believed that if they produced a product, it would sell itself. Marketing was largely irrelevant, and management focused primarily on reducing costs.

Sales Orientation Period (1940s): By the 1940s, businesses realized that actively promoting their products could significantly boost sales. This led to the birth of modern marketing, including heavy advertising, sales promotions, and public relations efforts to drive demand.

Customer Orientation Period (1950s): The focus shifted dramatically from pushing products to understanding consumer needs and wants. Marketers began developing products based on consumer demand, and the famous phrase “the customer is king” was coined. This period marked a shift towards long-term business objectives rather than just short-term sales.

Social Orientation Period (1980s and Beyond): By the 1980s, marketers had to consider not just consumers’ needs, but also their social welfare. The rise of Corporate Social Responsibility (CSR), which you studied in Learning Outcome 2, emphasized the role of businesses in contributing positively to society. The rapid spread of information via social media further complicated the marketing landscape, requiring businesses to adapt their strategies to changing public perceptions and expectations.

Marketing in Today’s World: In today’s increasingly competitive world, businesses are in a race to stay ahead of the pack. Understanding the evolution of the marketing concept is essential for grasping how companies respond to consumer needs. As you move forward in this course, consider how these historical shifts in marketing influence contemporary strategies and business success.

8.2 Explain how to develop a marketing strategy.

Developing a Marketing Strategy: Target Market and Marketing Mix

The key to developing a successful marketing strategy is maintaining the right marketing mix that satisfies the target market and fosters long-term relationships with customers. In essence, there are two fundamental steps in crafting an effective marketing strategy:

Identifying your target market

Developing your marketing mix

Step 1: Identifying Your Target Market

Before determining what their customers want, businesses must first identify the specific groups or types of customers they are targeting. This target market forms the foundation of the entire marketing strategy. Understanding these customer segments allows businesses to tailor their messaging and efforts effectively. Since different people need to be convinced in different ways that they need a product, identifying the right target market is crucial.

Target marketing offers businesses a chance to maximize their marketing investment. For instance, a catering service might not want to advertise in a broad, general newspaper insert. Instead, the business can identify the right audience, such as families in a particular area, and target them with direct mail, flyer deliveries, or social media ads for better returns on investment (The Balance for Small Business, 2020).

Market Segmentation Approaches

There are three key strategies businesses can use to identify their target market:

Demographic Segmentation
This approach categorizes the market based on demographics like age, gender, income, education, etc. Research shows that people aged 18-34 may prefer beer over wine, while those 55 and older lean toward wine. A winery, for example, would target consumers aged 55 and up.

Geographic Segmentation
This strategy considers the location of consumers. Certain geographic areas may have distinct product needs. For instance, a yard care company might target neighborhoods with older residents who may need assistance maintaining their properties.

Psychographic Segmentation
This approach considers consumers’ lifestyles, values, and preferences. For example, some consumers may have a strong interest in environmental issues, making them prime targets for businesses like Greenlid, which promotes eco-friendly products.

Behavioristic Segmentation
This method categorizes consumers based on their behavior towards products, including their purchasing habits and product knowledge. A skincare brand like Olay utilizes behavioristic segmentation by offering personalized product recommendations based on data from consumers about their skin condition.

Behavioral segmentation is especially valuable because it allows marketers to identify the most engaged customers and allocate resources efficiently. By focusing on those customers who are most likely to make a purchase, marketing efforts become more cost-effective. For example, YouTube targets users with ads based on their viewing history.

Step 2: Developing Your Marketing Mix

Once a business has identified its target market, it needs to develop its marketing mix. This is where the famous 4 Ps of Marketing come into play:

Product
The product is the good, service, or idea that satisfies the wants and needs of the target market. The business must ensure the product aligns with what the market desires.

Price
The price represents the amount the buyer is willing to pay. A product’s price should reflect the value it offers to the customer while also being competitive.

Place
Place refers to distribution — having the product available where and when customers want it. The product must be accessible to the target audience.

Promotion
Promotion encompasses all the activities used to increase the value of the product in the eyes of the consumer. It includes advertising, personal selling, public relations, and social media.

The customer is at the center of the entire marketing mix, driving decisions in each of the four areas. Hence, a well-chosen target market is key to the success of the marketing strategy.

RBC’s Gen Z Marketing Strategy: Responding to Business Challenges

Royal Bank of Canada (RBC), the largest bank in Canada, targets university students and recent graduates. This demographic is critical because, by establishing a relationship early, RBC aims to build long-term customer loyalty. RBC promotes itself through social media campaigns and sponsorships, including the Olympics and the Torch Relay, which feature youth-centered entertainment.

Discussion Questions:

Who is RBC’s target market, and how are they targeting them?
RBC targets young people, especially university students and recent graduates, by focusing its promotional efforts on social media and engaging in youth-focused events like the Torch Relay.

Are there other ways RBC could adjust its marketing mix to appeal to the youth market?
Students may suggest sponsoring more youth events, promoting student-focused initiatives, or increasing involvement with charitable causes.

Will being a leader in social media attract more young clients to RBC?
Answers may vary, but students could argue that it provides an opportunity to establish long-term relationships with young customers, which could lead to increased customer retention over time.

8.3 Review marketing research activities and information systems.

Unfortunately, understanding and predicting consumer behavior can be incredibly challenging. To succeed, businesses need to get “into their heads,” so to speak; they must be able to “walk in their shoes” to truly understand their wants and needs.

One of the most effective ways businesses can navigate this challenge is through market research. By conducting research, companies can improve their ability to predict and respond to consumers’ ever-changing desires, making it a valuable tool for long-term success.

For Canadian businesses, the Business Development Bank of Canada (BDC) offers a wealth of information on conducting market research, which can be a great resource for your business endeavors. You can explore their helpful insights here: BDC – Market Research.

There are two main approaches to market research: primary and secondary. Let’s take a closer look at each.

Secondary Research

Secondary research is generally the quickest, easiest, and least expensive option. This type of research involves gathering data from existing sources, such as published reports, government publications, and industry analyses. It is often the first step for businesses when conducting market research, especially when developing a Business Plan.

With the rise of online research, secondary data is more accessible than ever. Several reputable sources provide free, reliable information, such as:

Stats Canada – A government source that provides data on population demographics, economic trends, and much more.

Business and Industry Reports – Research organizations and industry sites offer detailed market analyses and trends that can help you understand your market better.

Take some time to explore these sources with students, allowing them to investigate specific aspects related to their business interests, such as:

Stats Can – Subjects – Population and demographics

Business and Industry – Research and business intelligence

Primary Research

On the other hand, primary research is the process of collecting new data directly from your market or customers. This research can take various forms, such as surveys, focus groups, interviews, or observations.

Although primary research is more time-consuming and expensive, it provides richer, more detailed insights that are directly relevant to your specific product or target market. It gives you the opportunity to gather data that secondary research sources can’t offer, and it helps businesses make more informed decisions based on their own findings.

Marketing Information System (MIS)

To efficiently manage and organize primary research data, many businesses establish a Marketing Information System (MIS). This system helps companies store, retrieve, and analyze the data collected, making it easier to identify patterns and insights. In today’s tech-driven world, an MIS is an invaluable tool for many businesses looking to leverage data for improved marketing strategies and decision-making.

In summary, both primary and secondary research play essential roles in understanding and anticipating consumer behavior. While secondary research can provide a quick, cost-effective overview, primary research is often necessary for in-depth, actionable insights. Both types of research should be combined to form a comprehensive understanding of the market.

8.4 Summarize the marketing environment.

Marketing Environment and Influencing Factors:

The marketing environment includes both direct and indirect forces that affect a business’s marketing decisions. This can include:

Legal, Regulatory, and Political Factors:

Legal changes like the legalization of cannabis, wage laws, and immigration regulations can all directly affect a business, especially when targeting specific groups such as immigrants or newcomers to Canada.

Social Forces and Public Opinion:

Customer preferences and public opinion significantly influence how businesses market their products. This idea can be understood through the concept of the Overton Window.

Competition and Economic Forces:

Businesses must constantly monitor competition and economic trends. For example, if opening a café, knowing how many others exist in the area and what unique offerings you bring is key. Economic shifts (e.g., recession) could impact luxury goods sales, especially if those goods have elastic demand.

Technology:

Innovations, such as drones, can change how products are distributed. Keeping an eye on technological advancements can be crucial for staying competitive.

Public Opinion and the Overton Window:

The Overton Window is a model for understanding how public opinion evolves over time, and this affects laws, technology, competition, and regulations.

Public opinion defines what is considered acceptable at any given time. As it shifts, businesses must adapt their strategies and marketing to stay relevant.

Example: Nike and Colin Kaepernick’s Campaign

Nike’s “Dream Crazy” campaign became a notable example of how companies can align with shifts in public opinion, particularly related to social movements like Black Lives Matter (BLM). Nike’s support of Colin Kaepernick despite the controversy surrounding his protests highlighted their alignment with changing public values.

Interactive Elements:

Students are encouraged to watch a video explaining how public opinion shapes the marketing environment (e.g., Nike’s “Dream Crazy” campaign and Kaepernick’s involvement), with a link to the video included.

8.5 Identify the role of product in the marketing mix.

In this section, we will explore the crucial components of the marketing mix, beginning with the concept of product development, then diving into branding and packaging. These are integral elements for crafting a successful marketing strategy that resonates with consumers and stands out in competitive markets.

Product Development and the Product Life Cycle

As discussed earlier, every product goes through several distinct stages from introduction to decline. Understanding where a product falls within its life cycle helps businesses adapt their marketing strategy to the stage it is in. Let’s take a deeper look at these stages:

Introduction:

Marketing efforts are at their peak.

Profits are typically negative as businesses recover the initial investment and development costs.

Competition is low, offering a strategic advantage.

Example: Self-driving cars, a pioneering innovation, are in this stage as they begin to emerge on the market.

Growth:

Sales and profits begin to rise significantly.

Competition intensifies as more players enter the market.

Marketing is focused on increasing market share and solidifying brand loyalty.

Example: Electric vehicles, such as those offered by Tesla, are in the growth phase, with increased sales and expanding consumer interest.

Maturity:

Sales growth slows, and profits stabilize or decline.

Pricing becomes competitive as firms differentiate based on features or branding.

Products often undergo redesign or improvement.

Example: Traditional automobiles, which are in a mature stage, facing heightened competition from new technologies like electric vehicles.

Decline:

Sales significantly drop as demand wanes.

Companies reduce prices and marketing efforts.

The product may be retired or redesigned if there’s a way to rejuvenate it.

Example: Diesel cars, which are facing reduced demand due to environmental concerns, are in the decline phase.

Discussion Prompt: Reflecting on these stages, consider a product you are familiar with. Where do you think it currently lies within the product life cycle? How do its marketing strategies align with its position?

Branding and Building Trust

Branding is a vital aspect of any marketing strategy. It’s not just about a logo or name; it’s about establishing a strong, consistent identity that connects with consumers. A well-executed branding strategy generates trust, loyalty, and, ultimately, brand equity. Building brand equity involves creating a positive and consistent impression over time, which leads to consumer preference and the ability to charge higher prices for your product.

Key Points on Branding:

Trust and Loyalty: Effective branding builds consumer trust. When people make buying decisions, they rely heavily on their trust in the brand. This trust translates into consistent sales and a competitive advantage.

Brand Equity: A strong brand allows businesses to command a premium price. The higher the brand equity, the less price-sensitive customers become, making the demand more inelastic. This is the ultimate goal for any business.

Branding Examples:

Nike: With its “Just Do It” slogan, Nike connects with consumers on an emotional level, building trust and loyalty by aligning with values such as ambition and perseverance.

Apple: Apple’s consistent, clean, and minimalist branding reinforces the perception of high quality and premium pricing. The “Think Different” slogan continues to resonate with consumers looking for innovation.

Activity: Think of a product brand you connect with. Reflect on why you trust this brand. How has its consistent messaging influenced your purchasing decisions?

The Power of Slogans

A slogan can encapsulate your entire brand or product line in just a few words, making it memorable and persuasive. Successful slogans:

Stick in consumers’ minds.

Reflect the brand’s mission and connect emotionally with the target audience.

Stand out in a crowded market.

Examples of Memorable Slogans:

Nike – “Just Do It.”

McDonald’s – “I’m Lovin’ It.”

Coca-Cola – “Open Happiness.”

Activity: Break into groups and create a slogan for a product of your choice. Test it with your peers to see if it resonates and make adjustments as needed.

Packaging and Labelling as Marketing Tools

Packaging is more than just a container—it’s a key aspect of the consumer experience. Good packaging:

Attracts attention on the shelf.

Differentiates products from competitors.

Communicates the brand’s values and messaging.

An excellent example of successful packaging is Kraft’s redesign of Philadelphia Cream Cheese. The new oblong container not only improved functionality but also made the product stand out on the shelf, enhancing consumer appeal. The redesigned packaging included:

A stackable design, optimizing space on shelves.

High-quality, molded labels that reflected the freshness of the product.

Discussion Prompt: Think about a product you buy regularly. How does the packaging influence your decision to purchase it? Share an example of smart packaging that you think has successfully changed the way you view a product.

8.6 Identify the role of price in the marketing mix.

Pricing Your Products: A Crucial Component of the Marketing Mix

Pricing is one of the most important decisions businesses make because it directly impacts sales, revenues, and profits. Unlike other elements in the marketing mix, pricing is the easiest to control, making it an essential tool for a business’s strategy. Various pricing strategies exist to help businesses maximize their profitability while meeting the needs of their customers.

Key Pricing Strategies

There are several distinct pricing strategies, each with its own advantages. For a deeper dive, you can refer to QuickBooks Small Business Centre, which explores these strategies in greater detail QuickBooks Pricing Strategy Types.

To further enhance your understanding, check out the video on pricing strategies: Pricing Strategy Video (starting at 0:32).

1. The Goldilocks Rule

One of the most fundamental concepts in pricing is finding the “just right” price. If your price is too high, no one will buy your product; if it’s too low, you may not cover your costs. The challenge is determining the optimal price that balances customer demand with profitability. This concept ties back to economic principles like finding the profit-maximizing price and price discrimination.

2. Price Discrimination

This strategy involves charging different prices to different customers or markets based on their willingness to pay. It’s a strategy often used in industries like airlines, hotels, and entertainment. For example, businesses like golf courses often use price discrimination by offering different prices for adults, seniors, and youth at different times (e.g., evening rates).

3. Pricing Strategies Examples

Penetration Pricing:
When entering a saturated market, businesses may set their prices low to attract customers and gain market share. For example, a new pet food brand might sell at a loss initially but draw in a large number of customers, ultimately developing brand loyalty.

Price Skimming:
Often used for new technological products, price skimming involves setting a high initial price to attract high-income early adopters. As the product matures, the price is gradually lowered to attract a broader audience. Think of new tech gadgets like smartphones or gaming consoles.

Premium Pricing:
To position a product as a high-quality offering, businesses may set a price higher than competitors. For instance, a premium pet food brand could price its products higher to appeal to pet owners who are willing to pay extra for perceived quality.

Psychological Pricing:
This pricing strategy plays on consumer psychology by pricing items just below a round number (e.g., $3.99 instead of $4). Customers perceive this as a better deal, despite the minimal price difference.

Bundle Pricing:
Businesses often offer discounts for purchasing a group of products or services together. For example, a beauty salon might offer a “Couple’s Pedicure Package” at a discounted price, encouraging customers to buy multiple services at once.

Price Lining:
Price lining involves offering products at various price points, typically structured in tiers. A spa, for instance, may offer three types of massage packages—basic, deluxe, and premium. Customers often gravitate toward the premium option, thereby increasing revenue.

Dynamic Pricing:
This strategy involves adjusting prices based on market demand, time, or customer profile. For example, a golf course might offer different prices for morning vs. evening tee times, or charge different rates based on customer type (adult, senior, youth).

Promotional (Discount) Pricing:
Promotional pricing involves offering temporary discounts to boost sales during specific periods, such as holidays or seasons. A salon might offer a limited-time discount for a “Couple’s Pedicure Package” during beach season to attract more customers.

8.7 Identify the role of place (distribution) in the marketing mix.

The Importance of “Place” in the Marketing Mix

While the “Place” component of the marketing mix may often be overlooked, it plays a crucial role in the successful delivery of a product to consumers. Although it is not as glamorous as other aspects like product, price, and promotion, “Place” has significant implications for sales and profitability. In fact, it is considered one of the most challenging elements of the 4 Ps to adjust because it often involves establishing long-term relationships with intermediaries who help move products from the producer to the consumer.

Distribution Channels

The marketing channel, which involves the distribution of products from producers to consumers, can vary in length and complexity. It might range from a short channel (direct from producer to consumer) to a much longer one involving multiple intermediaries.

Direct Marketing Channels

Direct marketing channels involve producers selling products directly to consumers. This is most often seen with services or certain consumer products. An example of a direct marketing channel would be Tesla, where the company sells cars directly to the consumer without any intermediaries.

Indirect Marketing Channels

In other cases, products move through one or more intermediaries before reaching the end consumer:

Producer to Retailer to Consumer: This is common when producers partner with retailers to sell their products. An example would be Walmart, where the retailer buys from producers and sells directly to consumers.

Producer to Wholesaler to Retailer to Consumer: This channel typically involves smaller retailers and less frequent product turnover.

Producer to Agent to Wholesaler to Retailer to Consumer: In cases where a new product requires a push to generate interest, agents or brokers may be employed to promote the product to wholesalers and retailers. An example of this would be agriculture commodities, where agents sell goods to various other market players.

Business-to-Business (B2B) Channels

For business products, a direct marketing channel is often more common. B2B marketing typically involves high-cost, customized products that require direct relationships. This type of channel allows for greater control over product specifications and delivery timelines.

Logistics and Supply Chain Management

Logistics refers to the physical distribution of products from producers to consumers. The relationship between producers and distributors is complex, requiring ongoing cooperation and, sometimes, concessions on both sides.

In today’s globalized economy, Supply Chain Management (SCM) has become increasingly important. The COVID-19 pandemic highlighted many vulnerabilities in complex global supply chains, bringing attention to the risks involved in moving products across countries and continents. Supply chain disruptions can be caused by various factors, including economic factors, environmental issues, and geopolitical events.

Supply Chain Disruptions

Supply chains are highly vulnerable to external factors. For example:

The Suez Canal Blockage: In March 2021, the Suez Canal was blocked for six days by the Ever Given, a container ship that ran aground. This disruption had a significant global impact on trade, highlighting the fragility of supply chains. In January 2023, another incident in the same canal further stressed the importance of monitoring and managing such critical trade routes.

The War in Ukraine: The ongoing conflict has affected supply chains, especially in the food and energy sectors. The war has disrupted shipments and caused rising prices. Reports of food shortages and inflated prices due to supply chain issues have been prevalent since the onset of the war.

Addressing Supply Chain Issues

To mitigate supply chain disruptions, businesses and governments must focus on:

Effective Communication: Developing strong relationships with intermediaries can help ensure smooth coordination across the distribution channels.

Investing in Infrastructure: Building robust infrastructure is essential to prevent bottlenecks and reduce vulnerabilities, especially during times of economic or environmental turbulence.

Shortening the Supply Chain: In times of crisis, businesses may opt to shorten the supply chain, adopting models like farm-to-table or focusing on local suppliers to reduce dependency on international routes.

Case Study and Homework: Recent Supply Chain Disruptions

As part of your homework, do a little research on a recent supply chain disruption. It can be of any magnitude, but make sure it is a real-world example. You can use the links below for reference:

Biden Backs 24/7 Operations at West Coast Ports to Ease Bottlenecks

War in Ukraine Impact on Supply Chains

Conclusion

The Place aspect of the marketing mix is central to the product’s success. Efficient logistics and supply chain management ensure that products are available to consumers where and when they need them. Despite its complexity and challenges, it’s an essential part of any business strategy, especially in a globalized market.

8.8 Identify the role of promotion in the marketing mix.

Promotion is a key aspect of the marketing mix. Without promotion, even the best product at the right price will not sell because no one will know about it. The primary goal of promotion is to increase demand for a product. In economic terms, this means shifting the demand curve to the right, so consumers are willing to pay more for each unit or that more units are sold at each price. This drives profit maximization.

The Promotion Mix: Elements and Their Importance

The promotion mix typically includes four key elements, each with a unique role in the overall promotional strategy. Different products and markets require different mixes and balances of these elements. While these four elements have existed for a long time, the platforms and methods used to deliver them are continually evolving, especially with the rise of digital and social media.

1. Advertising

Advertising is the most common form of promotion. It involves creating print, audio, and/or video messages that reach mass audiences through various media channels like television, radio, print, and increasingly, digital and social media platforms. Advertising is used to inform, persuade, and remind target markets about a product to increase sales.

Pros and Cons of Various Advertising Media:

Television: Mass reach but high cost.

Radio: Cost-effective, targeted, but short and transitory.

Newspapers: Cheap and local but declining readership and short shelf-life.

Magazines: Good quality and targeted but high cost and inflexible.

Outdoor: High visibility but limited messaging.

Direct Mail: Flexible and targeted but can be expensive and dismissed as junk mail.

Internet: Global reach and interactive, but short-lived engagement.

Mobile Marketing: Effective for younger demographics but easily ignored.

Social Media: Inexpensive and relational but consumers may not appreciate ads.

2. Personal Selling

Personal selling is used with more customizable or high-priced products, where a salesperson interacts directly with the client to close the sale. Though effective, it is also expensive. Direct marketing, where businesses communicate with customers via mail, email, phone calls, etc., is a more cost-effective variation of personal selling.

Example: Realtors, financial planners, car salespeople, and Sephora (high-end beauty products).

3. Publicity

Publicity, or public relations, involves getting media attention without paying for it directly. It’s typically cheaper than advertising but can be less predictable in effectiveness. Publicity helps create awareness, though it does not directly sell products or highlight specific features. Public relations also contributes to building a positive public image.

Example: Media coverage for new product launches or social causes.

4. Sales Promotion

Sales promotion is a temporary tactic designed to increase sales quickly by offering discounts or other incentives. It’s often used to boost awareness, satisfaction, and loyalty. Effective sales promotions complement other, more permanent promotional strategies.

Examples: Coupons, samples, in-store demonstrations.

The Role of Digital and Social Media in Promotion

In today’s world, digital marketing plays a crucial role in all aspects of the promotional mix. Canadians, like many others, are spending increasing amounts of time online. The COVID-19 pandemic has further accelerated this shift, making digital interactions, shopping, and marketing central to business strategies.

Types of Digital Promotion:

Pay-per-click (PPC): Advertisers pay when users click on their ads.

Search Engine Optimization (SEO): Increasing visibility on search engines.

Behavioral Tracking: Tracking online behavior to tailor ads to users.

Mobile Marketing: Using mobile devices to communicate marketing messages.

Influencer Marketing

Influencer marketing has transformed traditional celebrity endorsements. Instead of relying on famous celebrities, businesses partner with influencers who have built niche followings on platforms like Instagram or YouTube. These influencers have authority and relationships with their followers, making their recommendations more impactful.

Example: Social media influencers who partner with brands like Nike or travel companies.

Sales Promotion: Techniques and Examples

Sales promotion is crucial for businesses of all sizes and industries. Some of the most common sales promotions include:

Coupons: Discounts provided on the next purchase.

Samples: Free product trials to encourage customers to try the product.

In-store Demos: Live demonstrations to show how the product works.

Sales promotions are particularly effective when used throughout a product’s lifecycle. For instance, they can be used to introduce a new product, boost sales during off-peak times, or clear out inventory.

Example: Sephora uses a combination of samples, loyalty programs, and special discounts.

Conclusion

Promotion is an integral part of the marketing mix that helps businesses drive awareness, demand, and sales. The mix of advertising, personal selling, publicity, and sales promotion, combined with evolving digital and social media strategies, allows businesses to connect with their customers in a variety of ways. As the marketing landscape continues to shift, businesses must adapt their promotional strategies to meet the needs of their target audience.

Homework/Activity

Discussion Prompt: Students can research a recent supply chain disruption (e.g., Suez Canal blockage, impact of the war in Ukraine) and share how businesses can respond to these disruptions through better communication and relationship-building with intermediaries in the marketing distribution channel.