Promotion and advertising

Promotion is communication that informs potential customers about a product and persuades them to buy it. The promotion mix has four tools: advertising, personal selling, sales promotion and publicity.

Advertising is a paid, impersonal form of communication by an identified sponsor. It is a monologue, not a dialogue: the customer cannot reply.

Merits: it reaches a mass audience (a national daily reaches lakhs of readers); it builds customer confidence and satisfaction; it is very expressive, with pictures, colour and sound; and it is economical per person reached.

Objections, and their answers:

• It adds to cost. True, but it raises demand, and bigger output brings economies of scale, so the cost per unit can fall.
• It undermines social values by making people want things they cannot afford. But it also informs people about better products.
• It confuses buyers, since every brand claims to be the best. But buyers can compare and choose.
• It sells inferior products. But a firm cannot keep selling a poor product on advertising alone, and false claims can be prosecuted.

Firms making industrial goods rely less on advertising and more on personal selling.