The Goals of Promotional Strategy, Explained

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The Goals of Promotional Strategy

Business Essentials · Chapter 15: Pricing and PromotionSection 15.4 · lesson 71 of 10513 min · free with a free account

← The Communication Funnel: From Promotion to PurchaseNext lesson: Synergy in Promotion: Integrated Marketing Communications →

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In this lesson

What promotion is for, how to set and fund it, and how to judge it.

  • State the objectives promotion can serve
  • Set an objective with all 5 required elements
  • Compare 4 ways to set a promotional budget
  • Assess a promotional plan against its objectives

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Everything said in the video, section by section (1,890 words). Read along, or search it.

Pricing and Promotion

The Goals of Promotional Strategy

Promotion is easy to spend money on, and surprisingly hard to aim. This section asks a simple question. What is a given piece of promotion actually for? We'll start with the objectives promotion can serve, and how they shift across a product's life cycle. Then push and pull, the two directions promotion can travel through a channel. Next comes the craft of setting an objective, with five elements that make it testable. We'll look at four weak objectives, and fix each one. Then the budget question, the promotional mix, and how to measure whether any of it worked. And we'll close on ethics, where one debate stays genuinely open.

What Promotion Is For

3 Core Objectives, 3 More

Promotion serves three core objectives. To inform is to tell an audience that a product exists, and what it does. That fits when the receiver has no prior knowledge to build on. To persuade is to build a favorable attitude, and move the receiver to prefer this product over others. That fits once basic awareness exists, and the task becomes winning a comparison. To remind is to keep a known, already favored product present in the receiver's mind. By then, awareness and preference are in place. The remaining risk is simply being forgotten. Three further objectives reach beyond that core. To differentiate is to stake out a distinct position against competitors, the positioning work from section twelve point one. To build brand equity is to strengthen the value and reputation a brand accumulates over time. And to support the channel is to help intermediaries sell the product. Notice that last one. It isn't aimed at the final consumer at all.

Objective and Life Cycle

What the Market Needs to Hear Changes

The objective that fits best changes as a product moves through its life cycle. At introduction, informing dominates. The product is new, and most of the audience has never heard of it. During growth and into maturity, persuading takes over. Competitors have arrived, so the job shifts from simple awareness to beating specific rivals. Later in maturity, reminding becomes the main objective. People already know the product and like it. The danger now is fading into the noise of daily life. This isn't a rigid rule for every product. But it follows the same logic as the life cycle itself. What a market needs to hear changes as its relationship with the product matures. So a reminder campaign at launch wastes money, and so does an introduction for a product everyone knows.

Figure 15.4.1

Push and Pull Through a Single Channel

Promotional effort can travel in two directions through a distribution channel. A push strategy aims at the channel members, the wholesalers and retailers. The goal is to get them to carry the product, stock it prominently, and actively sell it on. Its tools are trade allowances, personal selling aimed at the trade, and training or incentives for channel staff. A pull strategy aims at the final consumer directly. It uses consumer advertising and direct-to-consumer promotion. The demand it creates then works backward. Consumers ask retailers for the product. Retailers order from wholesalers, and wholesalers order from the producer. Here's the point worth stressing. Most businesses run both at once. Push secures the shelf space and channel cooperation, so the product is available at all. Pull creates the consumer demand that actually moves it once it's there. Strong in only one, a business finds either a stocked product nobody asks for, or demand with nothing on the shelf.

Setting an Objective

5 Elements of a Well-Set Objective

Now to the craft of setting a promotional objective. A well-set objective has five elements. The target audience names exactly who the communication should reach. The response sought says what that audience should think, feel, or do as a result. The funnel stage names which point in the response hierarchy the objective targets. That's the hierarchy from the previous section, running from awareness to purchase. The measure says how success will actually be assessed. And the timeframe says by when the response should happen. Leave out any one of these, and the objective fails in two ways. Before the campaign, it's hard to design a message for. Afterward, it's impossible to evaluate. Nobody can say whether it worked.

Defective Objectives

4 Weak Objectives, Corrected

Four defective objectives show the point, each missing one or more elements. Increase brand awareness sounds reasonable. But it names no audience, no measure, and no timeframe. The fix specifies unaided awareness among adults aged twenty-five to forty in the target region. It rises from a known baseline to a stated level, within six months. Boost sales has a subtler flaw. Beyond naming no audience, it confuses the objective with a business outcome that many factors influence. And it never says which funnel stage promotion is meant to move. The fix targets purchase conversion among website visitors who already have an item in their cart, this quarter. Make people like us more has no measurable response and no timeframe. The fix measures favorability among existing customers, surveyed after a service interaction, within the year. Get the word out specifies nothing at all. Its fix is a stated share of aided recall of the product's core benefit, within ninety days of launch.

Worked Illustration

Corvane Home Sets a Launch Objective

Here are all five elements working together, using figures built for the exercise. Corvane Home is a fictional maker of kitchen appliances, launching a new countertop device. It wants a promotional objective for its first month. The audience is adults aged twenty-eight to fifty-five who visited the website in the past ninety days, without buying. The response sought is a completed first purchase. The funnel stage is conviction moving to purchase. Why that stage? These people already know the brand, and cared enough to visit the site. The measure is the conversion rate from a website visit to a completed order, within this group. And the timeframe is the thirty days after launch. Put together, the objective reads like this. Raise purchase conversion in that group, from a known baseline to a stated rate, within thirty days of launch. That's the real test of a good objective. A colleague could check afterward, without ambiguity, whether it was met.

Table 15.4.1

4 Ways to Set the Budget

How much to spend is a separate question from what to say. Four approaches are common. Percentage of sales sets the budget as a fixed share of past or forecast sales. Its failure is circular. A sales downturn cuts the very budget meant to help reverse it. Competitive parity roughly matches what competitors spend. It assumes they set their budgets correctly. So it copies their mistakes, and ignores your own objectives. All you can afford spends whatever is left, so promotion is funded last, cut first, and chronically underfunded. Objective and task works in the opposite direction. It starts from the objectives, works out the tasks each one needs, and costs those tasks. The budget is built up from the work, not taken from a rule of thumb about an unrelated number. That makes it the only approach that ties spending to what promotion is trying to do. The other three set a number first, which risks overspending on one objective, or starving another. So why do the easy three dominate in practice? Because each needs just one readily available number. An easy budget isn't necessarily wrong. But it wasn't derived from what the promotion needs to accomplish.

The Promotional Mix

5 Tools, Weighted by 5 Factors

The tools that carry out a promotional strategy are called the promotional mix. Chapter sixteen develops each one. Advertising is paid, non-personal communication through a mass medium. Sales promotion is a short-term incentive to buy, such as a coupon or a temporary discount. Personal selling is direct, individual communication between a company representative and a prospective buyer. Public relations manages reputation and relationships, often through unpaid media coverage rather than bought space. Direct and digital communication goes to identified individuals, like an email campaign or a personalized digital ad. Five factors decide how a business weights these tools. Product type matters. A complex product needing explanation leans on personal selling, and a simple one on advertising. Market type matters too. Business markets have fewer, larger buyers, while consumer markets have many small ones. Life cycle stage matters, following the pattern we've already seen. Budget matters, because personal selling costs far more per contact, even though it can persuade more per contact. And push or pull matters. Push leans on trade selling and promotion, while pull leans on advertising.

Mixes Compared

Conveyor Systems and Breakfast Cereal

Two fictional businesses show how those factors combine. Thornbury Industrial makes conveyor systems for factories. Its product is complex and expensive, and it sells to a small number of large manufacturers. That's a business market, and every sale involves detailed technical specification. It also involves a buying center, with several people in different roles. A mass advertisement can't speak to each of them individually. So Thornbury leans heavily on personal selling. Varlow Foods makes breakfast cereal. Its product is simple and cheap, and it sells to millions of individual households. That's a consumer market, with a low-involvement purchase pattern. Reaching millions of small, similar purchases efficiently favors a mass medium. Individual contact at that scale would cost far too much per contact. So Varlow leans on advertising. Neither mix is more correct in the abstract. Each fits the product, market, and purchase pattern it was built for.

Measuring Effectiveness

Match the Measure to the Objective

So how do you know whether promotion worked? Use the measure that fits the specific objective you set. An awareness objective is tested with a recall measure, not a sales figure. A purchase objective is tested with actual conversions, not a favorability rating. Mixing those up is a common way to declare a campaign a success, or a failure, unfairly. The attribution problem from the previous section applies here too. A purchase is usually shaped by several sources, so tying it to one communication is genuinely hard. That should make a business skeptical of confident claims. Be especially wary of a report that a campaign caused a given rise in sales. Ask what else changed over the same period. A seasonal pattern, a competitor's own promotion, or a broader shift in the economy could explain the change. Any of them might account for some, or all, of the rise, whatever the campaign did.

The Ethical Dimension

Honest Claims, and an Open Debate

Promotion has its own ethical dimension, related to the pricing ethics of section fifteen point two. Truthfulness means claims are accurate, and not misleading. Substantiation means holding evidence for a factual claim before making it, not hoping it turns out true. Promotion aimed at vulnerable audiences calls for the same added care described in the pricing section. And regulation sets a floor. The Federal Trade Commission can prohibit unfair or deceptive acts or practices in advertising. Industry-specific rules, for categories like pharmaceuticals or financial products, and state consumer protection laws can add more. Then there's a debate worth stating evenhandedly. Does promotion inform a decision, or manufacture a need? One view says promotion mainly informs, making people aware of genuine options and benefits they'd otherwise miss. On that view, even emotional promotion for a useful product is a legitimate part of a market economy. The opposing view says much promotion creates a felt want that didn't exist before, or exploits psychological tendencies. On that view, the manufactured need is a real cost to consumers and to society. Part of the dispute is empirical. How much spending works each way is hard to establish, and likely varies enormously. Part is normative. How much weight should consumer autonomy get, against those documented psychological effects? This course takes no position between them.

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FAQ

Questions students ask us

About The Goals of Promotional Strategy

What are the three main objectives of promotion?
The three core objectives of promotion are to inform, to persuade, and to remind. Informing tells an audience that a product exists and what it does; persuading builds preference over rivals once awareness exists; reminding keeps a known, liked product in mind. They tend to follow the product life cycle, with informing at introduction, persuading through growth into maturity, and reminding later in maturity. Promotion can also differentiate, build brand equity, and support channel members.
What is the difference between a push and a pull promotional strategy?
A push strategy aims promotion at channel members such as wholesalers and retailers, while a pull strategy aims it at final consumers. Push uses trade allowances, personal selling to the trade, and incentives for channel staff to secure shelf space and active selling. Pull uses consumer advertising so that shoppers ask retailers for the product, and orders flow back up the channel. Most businesses run both, since availability without demand, or demand without stock, fails.
How do you write a good promotional objective?
A good promotional objective names five elements: the target audience, the response sought, the funnel stage, the measure of success, and the timeframe. Increase brand awareness falls short because it has no audience, measure, or deadline. A stronger version raises unaided awareness among adults aged 25 to 40 in the target region from a known baseline to a stated level within six months. Without all five, a campaign is hard to design and impossible to evaluate.
What is the objective and task method of setting a promotion budget?
The objective and task method builds a promotion budget from the work required: set the objectives, identify the tasks each one needs, and cost those tasks. That ties spending to what promotion is meant to achieve. The common alternatives start from a single number instead. Percentage of sales cuts spending when sales fall, competitive parity copies rivals' choices and possibly their mistakes, and the all-you-can-afford method funds promotion last and cuts it first.

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