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11.4. The Promotional Mix

The basic promotional mix consists of advertising, sales promotion, personal selling and PR. When the concept of the promotional mix was first developed, these were the only elements available to marketers, but in the past 40 years more promotional methods have appeared which do not easily fit within these four categories. The promotional mix is like a recipe, in which the ingredients must be added at the right times and in the right quantities for the promotion to be effective. Messages from the company about its products and itself are transmitted via the elements of the promotional mix to the consumers, employees, pressure groups and other publics. Because each of these groups is receiving the messages from more than one transmitter, the elements of the mix also feed into each other so that the messages do not conflict.

The elements of the promotional mix are not interchangeable, any more than ingredients in a recipe are interchangeable; a task that calls for personal selling cannot be carried out by advertising, nor can public relations tasks be carried out by using sales promotions. Promotion is all about getting the message across to the customer (and the consumer) in the most effective way, and the choice of method will depend on the message, the receiver and the desired effect.

A variety of factors should be considered to determine the correct promotion mix in a particular product/market situation. These factors may be classified as product factors, market factors, customer factors, budget factors, marketing mix factors etc.

Development of an optimum promotion mix is by no means easy. Many companies often undermine the roles of advertising, personal selling, and sales promotion in a given product or market situation. Decisions about the promotional mix are often diffused among the decision makers, impeding the formation of a unified promotion strategy.

Recent research conducted by the Strategic Planning Institute for Cahners Publishing Co. identified the following decision rules that can be used in formulating ad budgets. These rules may be helpful in finalizing promotion mix decisions.

  • Market share - A company that has a higher market share must generally spend more on advertising to maintain its share.
  • Sales from new products-If a company has a high percentage of its sales resulting from new products, it must spend more on advertising compared to companies that have well established products.
  • Market growth-Companies competing in fast-growing markets should spend comparatively more on advertising.
  • Plant capacity-If a company has a lot of unused plant capacity, it should spend more on advertising to stimulate sales and production.
  • Unit price (per sales transaction)-The lower the unit price of a company’s products, the more it should spend on advertising because of the greater likelihood of brand switching.
  • Importance of product to customers (in relation to their total purchases)- Products that constitute a lower proportion of customers’ purchases generally require higher advertising expenditures.
  • Product price-Both very high-priced (or premium) products and very low priced (or discount) products require higher ad expenditures because in both the cases, price is an important factor in the buying decision and the buyer must be convinced (through advertising) that the product is a good value.
  • Product quality- Higher-quality products require a greater advertising effort because of the need to convince the consumer that the product is unique.
  • Breadth of product line-Companies with a broad line of products must spend more on advertising compared to companies with specialized product lines.
  • Degree of standardization-Standardized products produced in large quantities should be backed by higher advertising outlays because they are likely to have more competition in the market.

Expansion of product market largely depends on the way the product sales are organized. There are many techniques adopted in organizing effective sales. They are- departmental stores, supermarkets, mobile sale units, emporia, exhibitions and fun sales. Among these systems, the departmental stores and supermarkets have received considerable attention in towns, urban and semi-urban areas, while the mobile shops and fun sales have induced the buyers in the rural areas. The fun sales are organized in less developed areas through the entertainment program. Such a system is being observed in different Asian countries. In future more flexible methods of sales may appear to cover a larger consumer segments under product market.

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