Promotion refers to the awareness created of the introduction of a new product and availability of an already existing product by means of advertising and selling activities.The main objective of promotion is to make customers aware of product features, its uses and benefits. Promotion activities help the firms to position their products in the right way in the market to reach the target customers. Effective promotional activities consist of a clear and simple message which is directly targeted at a specific group of people, reached by means of an appropriate medium like television or print adverts. The message should be consistent with the overall marketing image of the firm and should reach the target audience and generate the desired response. Promotional activities involve advertising, personal selling, public relations and sales promotions.
Generally, promotion is communicating with the public in an attempt to influence them toward buying your products and/or services.
How does promotion differ from advertising? Promotion is the broader, all inclusive term. Advertising is just one specific action you could take to promote your product or service. Promotion, as a general term, includes all the ways available to make a product and/or service known to and purchased by customers and clients.
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The word promotion is also used specifically to refer to a particular activity that is intended to promote the business, product or service. A store might advertise that it's having a big promotion on certain items, for instance, or a business person may refer to an ad as a promotion.
Tesco has become increasingly aggressive in the last few years. During the late 1980s and early 1990s, the company increased its market share steadily but it remained a constant distance behindSainsbury's. However, Tesco's share overtook that of Sainsbury's during 1995 and, by the middle of 1996, it had opened up a 2% lead. This shows that Tesco is looking to build on its leadership by constantly working to ensure that it is maintained. Sainsbury's, on the other hand, could be said to have been complacent, especially as it was continuing to gain share. However, Tesco's recent aggression has been matched by a poor performance from Sainsbury's.
Source:Institute of Grocery Distribution
Early in 1996, the City was criticising Sainsbury's for allowing Tesco to get so far ahead of the game in terms of customer service, loyalty and perceived price competitiveness. Sainsbury's was also accused of not promoting itself sufficiently and while running many similar customer initiatives as Tesco, it has failed to take the lead or develop unique products or services. Further to this, it has showed itself to be "unresponsive" in a fast moving market. This was clear in the debacle over Sainsbury's Reward card launch. Tesco has also shown itself to be faster moving in the development of targeted store types, intended to reach different consumers at different times.
One of Tesco's key weapons in the battle for retail supremacy has been its Clubcard loyalty scheme and the subsequent launch of the Clubcard Plus debit card. These have shown Tesco taking a clear initiative and then building rapidly on its advantage. Sainsbury's was not only slow to launch its Reward card nationally, but its strategy appeared unclear with conflicting statements about its intentions. Once it had been launched, the initial advertising helped create a short term rise in market share. Subsequently, it has failed to have any major impact and has been beset with technical problems. One footnote to this is that loyalty cards should be seen as a longer term marketing tool since they enable retailers to learn more about their customers' shopping habits and respond accordingly with tailored offers. The key to the success of the loyalty scheme is not launching it but how it is used within the total marketing mix.
(www.smbtn.com/books/gb54.pdf - promotional mix plan)
Tesco to promote its packaging reduction at Pro2Pac
Tesco's packaging technical manager will speak at next month's Pro2Pac exhibition about the retailer's work on packaging reduction.
Tesco has set a target to reduce the weight of its packaging by 25% by 2010, compared to a 2005 baseline. Stephen Pizer will use the exhibition at London's ExCeL to talk about the initiatives the multiple is employing to achieve this reduction.
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Pizer said Tesco had already saved 20,000 tonnes of corrugated board through switching to returnable transit packaging rather than single-use.The retailer has also doubled the concentration of its squash soft drinks, saving around 1,500 tonnes of PET and is using some rPET. "Where appropriate we will use recycled material, but the critical thing is that the pack is fit for purpose," said Pizer. He added that Tesco had no plans to extend its use of bioplastics beyond the organic products already packed in biomaterials.The 25% reduction target covers all packaging, including primary, retail-ready and transit packaging, but does not include carrier bags.
Pizer added that there were also plans to extend the use of carbon footprint labelling. Tesco introduced carbon footprint labels on 20 products in May last year. "We have been running focus groups and we will use the learnings from those to inform future labelling," he said. Pizer will be speaking at 2pm on 18 March. Pro2Pac runs from 15 to 18 March. For more information visithttp://www.pro2pac.co.uk/ http://www.packagingnews.co.uk/_images/magpackagingnewscouk.gif
2. The courage to innovate. Many are surprised to learn that these days Tesco generates non-food sales of £10.4 billion a year – nearly a quarter of its revenue. These sales include consumer financial services, DVD sales and rentals, music downloads, internet services and budget software. Tesco has even expanded into the housing with Tesco Property Market: “A one-stop online property shop”. Sales of Tesco's non-food products and services are currently growing at twice the rate of its food products.
Of course, full-throttle diversification is not suitable for all businesses. Tesco's decisions to do so have been carefully calibrated. However, Tesco's decisions have also been creative, innovative and brave. Who would have thought, just ten years ago, that a supermarket chain would be showcasing homes for sale?
3. Get to know your customers. Market research is an essential tool to any start-up or company considering expansion or diversification. I never cease to be amazed by the numbers of businesspeople – including experienced MDs or CEOs – who think that their enterprises are somehow immune to its benefits. If you avoid doing the work and spending the money, you are going on gut knowledge and prior assumptions, neither of which provide a foundation on which decisions should be made.
Tesco's ability to empathise with its customers is the result of in-depth research, and has been key to its resoundingly successful entries into so many new markets. In my opinion, Tesco does more research work than anyone else in the sector – and other retail chains are now following suit. Their market research doesn't stop at new customers, but covers existing customers' buying habits too.
Take the Tesco loyalty card: it wasn't their idea, but it is something they do so well that it has become the largest loyalty scheme in the UK, with an estimated 13 million members. The cards provide comprehensive analyses of what Tesco customers spend, what they spend it on, and when they spend it. As a result, Tesco has been able to hone its logistics, product ranges and launches to perfection.
4. Careful positioning. Anyone can do well, even in the most competitive of markets, with the right approach. Allan Leighton calls Sir Terry Leahy one of retail's “first professional marketers”. Tesco has, correctly, placed a premium on brand recognition. The branding has retained Tesco's signature red and blue colours, and its logo has been updated, but not dramatically altered.
In recent years, Tesco has expanded its customer base by its increased efforts to embrace customers from all levels of society, and all income brackets. For example, two popular food product ranges - the luxury range called “Tesco Finest” and the budget version, “Tesco Value” - are both carried within all of its stores.
5. Mopping up the spills. When something does go wrong, Tesco doesn't shirk responsibility, and speed of reaction is admirable. Take the BBC's Whistleblower documentary, viewed by 4.5 million people. An undercover reporter worked behind a fresh food counter at a Tesco branch, and subsequently claimed that serious breaches of hygiene and food safety procedures had occurred.
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The claims could have seriously harmed Tesco's reputation, which is founded upon good customer service, but the company's response was swift and limited damage. Tesco's trading director appeared on a video-link on Tesco's website, responding to the claims, within 48 hours of the programme's broadcast. An internal investigation was immediately launched, and fresh food counter employees were retrained. The matter was ushered towards its end, with retail analysts subsequently concluding that the documentary's impact upon Tesco would be “minimal”.
Rocket science? Absolutely not – but that is my point. Sir Terry Leahy has transformed his company into a superpower with a £43 billion turnover, but no “magic spell” has been sprinkled upon his road to success. Instead, he has used principles that are so simple and straightforward that any fast-growing company can adopt them and use them to boost turnover and profit margins.