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RESEARCH STARTERS
ACADEMIC TOPIC OVERVIEWS
Promotional Policies
Marketing > Promotional Policies
Abstract
A promotional policy is a set of principles and guidelines based
on an analysis of an organization's goals, objectives, resources,
and plans that is used to help develop marketing decisions,
strategies, and plans. In addition to the nature of the product or
service being offered and the characteristics of the target market,
a promotional policy must also take into account the corporate
image that the organization desires to portray to the public as
well as any ethical considerations about their product or mar-
keting approach. Promotional policies must by their very nature
differ from industry to industry and from organization to organi-
zation to refect the nature of business and the characteristics of
a particular organization.
Overview
Whether one thinks of it as a challenge, a game, or the ulti-
mate boredom, marketing is a fact of life for every business.
Even small business owners who swear that they never market
their products or services do through such methods as word-of-
mouth and social or business networking. On the other extreme
are large corporations with separate marketing departments and
large marketing budgets that enable the creation of a corpo-
rate persona, high brand recognition, in-depth research, and a
multi-pronged approach to identifying, capturing, and retaining
customers.
Strategic Marketing
Whether large or small, the business marketer is faced with a
plethora of ways to market the organization's goods and services.
Although one could, in theory, stand on the street corner and
hawk one's business products, a more solid marketing strategy
is necessary. Strategic marketing is a subfunction of marketing
that examines the marketplace to determine the needs of poten-
tial customers, the strategy of the competitors in the market, and
attempts to develop a strategy that will enable the organization
to gain or maintain a competitive advantage in the marketplace.
Marketing departments can choose from a number of ways to
market their company's products or services including advertis-
ing, direct response, sales promotions, and publicity. However,
no matter how well an advertisement or marketing campaign is
designed, unless one understands the needs of the customer, the
market, and the industry as well as the strengths and weaknesses
of the competition, these approaches are unlikely to be success-
ful. Strategic marketing is an approach to marketing that helps
an organization sharpen its focus and successfully compete in
the marketplace.
Strategic marketing is concerned with two primary compo-
nents: The target market and the best way to communicate the
value of one's product or service to that market. To develop a
viable marketing strategy, one must take into account several
key dimensions. First, as with any other strategy within the
organization, a marketing strategy needs to be endorsed by
top management. Marketing strategy is also political in nature:
Powerful units within the organization may disagree on the best
marketing strategy and an agreement or compromise may need
to be negotiated. Marketing strategies can also be affected by
organizational culture and the assumptions that it engenders. For
example, if the organization has always marketed its widgets to
business executives, it may fail to see the potential for market-
ing to lower level personnel within the organization or even for
Abstract
Overview
Strategic Marketing
Marketing/Promotional Policies
Factors to Consider
Applications
Marketing to Children
Conclusion
Terms & Concepts
Bibliography
Suggested Reading
Table of Contents
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Promotional Policies
personal use to adults or teenagers, with an important segment of
the marketplace not being considered as a result.
Marketing/Promotional Policies
Before one can develop a marketing strategy, determine the
appropriate marketing mix, develop and implement a plan that
will bring the business a suffcient return on investment for their
marketing dollars, or design an advertisement, one must frst
determine what the parameters within which one must design
one's marketing strategy are. Although one could take one's
marketing budget and spread it across as many categories of
the marketing mix as possible in an attempt to increase cover-
age of one's product or service, strategic marketing demands a
more considered, systematic approach that takes into account not
only the product but the internal and external factors that affect
how the product or service might best be marketed. Typically,
successful marketing campaigns start with a marketing or pro-
motional policy. This is a set of principles and guidelines based
on an analysis of the organization's goals, objectives, resources,
and plans. Typically, policies are set by the organization's gov-
erning body (e.g., board of directors) and are used to develop
strategy and guide decision making in support of meeting the
organization's goals and objectives.
Factors to Consider
As shown in Figure 1, promotional policies need to consider at
least four factors affecting the best way to market or promote a
product or service:
The characteristics of the product or service;
The characteristics of the target market;
The corporate image that the organization wishes to
portray;
Any ethical considerations in the marketing of the prod-
uct or service.
The characteristics of the products or services being marketed
by the organization have an obvious impact on the way that mar-
keting is done. Not all products and services are best promoted
in the same way. For example, a television spot advertising a
high-end business consulting service would probably yield more
results if placed on an all news channel rather than an all cartoon
channel. In addition, the nature of the target market also infu-
ences the way that goods and services are most appropriately
marketed. For example, a few years ago, a business bought air
time on two local radio stations: One a classical station and the
other a rock station. The narrative of the ads was the same, but
the background music was different to refect the musical tastes
of the audiences of the respective stations. Unfortunately, some-
where in the process, the ads were switched so that the classical
station received the ad with the rock music and the rock sta-
tion received the ad with the classical music. Soon thereafter,
the stations started playing an apology from the business that
had sponsored the ads: Numerous regular listeners of both sta-
tions had called in to complain about the appropriateness of the
ads. Although the business had attempted to segment the target
market into categories and tailor its advertising to appeal to the
tastes of the segments, the execution fell short, ending in a lower
return on investment than expected.
Figure 1: Factors Informing Promotional Policy
PROMOTIONAL
POLICY
Characteristics
of product/service
Characteristics
of target market
Corporate
image
Ethical
considerations
The characteristics of the product or service and of the target
market or market segment are important aspects of market-
ing, particularly when designing a marketing campaign that
will maximize one's return on investment. In addition, an orga-
nization must consider what place it wishes to occupy within
its industry. Corporate image is the perception of an organiza-
tion generally held by the public. To cultivate its corporate
image, a business needs to participate in activities that support
that image and avoid activities that might tarnish it. Certainly,
consulting frms and investment companies that have made the
headlines over the past few years have learned this fact the hard
way. However, even such decisions as where the organization
advertises and how its ads are designed can refect back on the
organization. This is one reason that from time to time organiza-
tions change their corporate logo or branding: To realign public
perceptions about them or to change their image to refect new
goals and objectives. In addition to activities directly focused
on marketing specifc products or services for the organization,
businesses also typically engage in public relations activities as
part of their marketing strategies. A corporate image may change
over time depending on the organization's circumstances, pub-
licity, and other publicly-known information. Public relations
activities help the organization to create and manage its public
image or reputation with outside agencies and groups. This
marketing function is responsible for developing positive mes-
sages about the organization and reducing the impact of negative
events and information on the organization's reputation. In addi-
tion to considerations of corporate image, businesses also need
to be concerned with ethical considerations in marketing and
take these into account in the development of their promotional
policy and eventual marketing strategy. For example, given the
link between smoking and lung cancer, one can no longer view
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Promotional Policies
advertisements for cigarettes on television and, in fact, some
tobacco companies actually participate in stop-smoking cam-
paigns (although they continue to manufacture their products).
Just as there is no such thing as the "ideal" marketing strategy that
is appropriate for all organizations, there is also no such thing as
the "ideal" promotional policy for all organizations. Different
types of organizations and even different industries will market
their products and services in different ways. For example, a fast
food chain may want to be associated with the concept of "quick
and easy" whereas a high-end restaurant would be more likely to
want to be associated with a fne dining experience.
Applications
Marketing to Children
One area of promotional policy that has been a topic of much
debate, particularly within the food industry, is the issue of
whether or not one should market directly to children. Obviously,
some products are designed specifcally for children, including
clothes, toys, and certain food products. The question, however,
is the degree to which it is ethically appropriate to market these
items directly to the children. For the most part, children do not
have a great deal of discretionary cash, so marketing directly to
children would appear to be a wasted effort. However, the wants
of children can have a great effect on the buying behavior of their
parents and other adults. In some cases, this is nothing more than
the type of infuence that is attempted by other marketing efforts
and there is little to say when marketing efforts encourage drink-
ing milk or buying comfortable shoes. However, both children
and their parents know that milk and shoes are necessary, so little
marketing effort is needed.
The ethical dilemma arises, however, when the item being
marketed to children is something that may go against the
parents' a priori philosophy of what is good or not good for
a child to own, eat, or wear (e.g., revealing clothes or high-
sugar snacks). The questionability of marketing to children in
ethically ambiguous situations has caused companies such as
Coca-Cola and the International Council of Beverages Asso-
ciations to institute guidelines regarding marketing to children.
Based on concerns over the rising obesity epidemic, particu-
larly in children, these organizations have issued a statement
saying that they take "special care" when deploying advertis-
ing practices to children under the age of 12 as children under
that age "may lack the necessary skills and judgements [sic] to
properly understand the purpose behind the persuasive tech-
niques commercial advertising represent" (Coca-Cola, 2008).
For this reason, they do not market their products directly to
children and only show children drinking their products in the
company of adult caregivers.
Not only may children not be able to make reasoned judgments
about the appropriateness and value of products, but marketing
may also change their beliefs and behavior, particularly regard-
ing the marketed product. Bridges and Briesch (2006) developed
a model to test the "nag factor" in marketing children's catego-
ries. They defne the term "nag factor" as an indirect marketing
path that begins with promotional activities aimed at infuenc-
ing the preferences of children who, in turn, request that their
parent(s) purchase the product. The promotional activities that
are likely to be successful with children tend to be different
from those that are successful with adults. Although adults, for
example, tend to develop brand loyalty and repeatedly purchased
preferred brands, children tend not to focus on brands but make
buying decisions (or at least acquisition decisions) based on the
characteristics of the product. This is why many products that
are aimed at children refect the latest popular theme or charac-
ter. In addition, purchasing decisions among children are made
differently based on age. Younger children, for example, tend
to look for products featuring the latest character, bonus offers,
tie-ins with moves, and so forth. Because younger children do
not necessarily understand that the general purpose of promo-
tional activities is to sell products, they can, therefore, infer that
unhealthy products are good for them because of the "endorse-
ment" of the character. Young children, however, do not remain
loyal to a particular brand once they make a purchasing decision,
but change brands when a product with a more current charac-
ter comes out. Teenagers, on the other hand, tend to be more
like adults in their buying behaviors, particularly when it comes
to brand loyalty, although they continue to respond to image-
focused messages.
Given the fact that most children do not have the necessary funds
to purchase items even if they form purchasing decisions, one
might wonder at the effectiveness of promotional activities that
are targeted towards children. However, Bridges and Briesch's
review of the literature on marketing to children found that the
nag factor has a defnite infuence on the purchasing behavior
of adults with such items as clothing, shoes, fast food and other
food items, snacks, and beverages. For example, one study found
that the nag factor accounted for one-third of the trips to a fast
food restaurant in 2003, up from only one-tenth in 1977. During
the years from 1992 to 2002, expenditures for marketing food
items to children increased from $6.9 billion to $15 billion. In
fact, research has shown that children tend to be infuenced by
marketing in categories that are considered unhealthy due to an
increase in calorie intake or a decrease in nutrition.
Based on their research, the authors found that the nag factor is a
real phenomenon as evidenced by the fact that households with
children tend to have more variety in their purchases for such
items as soft drinks and cereal than do households without chil-
dren. Such variety-seeking behavior tends to increase over time
as children become more sensitive to the infuence of promo-
tional tie-ins with dynamic characters and other popular themes.
These fndings have ethical implications for the way that organi-
zations market to children so that marketing efforts support their
promotional policies.
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Promotional Policies
Conclusion
Before one can develop a marketing strategy, one must frst
develop a marketing or promotional policy. These principles and
guidelines will help the marketing department develop a market-
ing strategy, marketing plan, and marketing mix that will best
support the organization in meeting its goals and objectives.
The organization's promotional policy must consider not only
the characteristics of the product or service being marketed or
the concomitant target market, but also the corporate image that
the business desires to convey to the public. Any ethical con-
siderations regarding the marketing of their products must also
be taken into account. By frst developing a well thought-out
promotional policy, marketers can better design marketing strat-
egies and plans that will support the organization in its goals
and objectives and maximize the return on investment that the
organization receives for its marketing dollars.
Terms & Concepts
Brand: A trademark or distinctive name that is identifed with
a particular product, service, or organization that makes it pub-
licly and easily distinguishable from other products, services, or
concepts. A brand may include a name, logo, slogan, or design
scheme associated with the product, service, or organization.
Brand Loyalty: The reluctance of a buyer to switch to another
brand of product or service because s/he is familiar and comfort-
able with the brand s/he is currently using or has used in the past.
Corporate Image: The perception of an organization that is gen-
erally held by the public. A corporate image may change over
time depending on the organization's circumstances, publicity,
and other publicly-known information.
Ethics: In philosophy, ethics refers to the study of the content of
moral judgments (i.e., the difference between right and wrong)
and the nature of these judgments (i.e., whether the judgments
are subjective or objective.
Market Segmentation: A marketing strategy in which a general
population or market is subdivided into categories based on an
a priori defnition of potential buyers and the likelihood of pur-
chase. Marketing efforts are then concentrated on the segment
most likely to purchase with the objective of gaining a major
share of the segment as opposed to a smaller share of the general
category of potential buyers.
Marketing: According to the American Marketing Association,
marketing is "an organizational function and a set of processes
for creating, communicating and delivering value to customers
and for managing customer relationships in ways that beneft the
organization and its stakeholders" (AMA, 2009)
Marketing Mix: The combination of product, price, place, and
promotion that is used to get a product into the hands of the con-
sumer. One of the primary tasks of marketing is to optimize the
mix to best position the product for success in the marketplace.
Marketing Plan: A plan that specifes the actions the organization
intends to take to obtain customers for its proffered goods or ser-
vices. The marketing plan includes the organization's marketing
strategy, including such things as pricing, budget, specifcation
of target markets, and intelligence about competitors.
Organizational Culture: The set of basic shared assumptions,
values, and beliefs that affect the way employees act within an
organization.
Policy: In a business setting, a policy is a set of principles and
guidelines based on an analysis of the organization's goals,
objectives, resources, and plans. Policies are set by the organiza-
tion's governing body (e.g., board of directors) and are used to
develop strategy and guide decision making in support of meet-
ing the organization's goals and objectives.
Public Relations: The process of creating and managing a public
image or reputation with outside agencies and groups. In busi-
ness, the public relations function is responsible for developing
positive messages about the organization and reducing the
impact of negative events and information on the organization's
reputation.
Return on Investment (ROI): A measure of the organization's
proftability or how effectively it uses its capital to produce
proft. In general terms, return on investment is the income that
is produced by a fnancial investment within a given time period
(usually a year). There are a number of formulas that can be used
in calculating ROI. One frequently used formula for determining
ROI is (profts costs) (costs) x 100. The higher the ROI, the
more proftable the organization.
Strategic Marketing: The subfunction of marketing that
examines the marketplace to determine the needs of potential
customers, the strategy of the competitors in the market, and
attempts to develop a strategy that will enable the organization
to gain or maintain a competitive advantage in the marketplace.
Strategy: In business, a strategy is a plan of action to help the
organization reach its goals and objectives. A good business
strategy is based on the rigorous analysis of empirical data,
including market needs and trends, competitor capabilities and
offerings, and the organization's resources and abilities.
Target Market: The people or businesses to whom the entrepre-
neur wishes to sell goods or services.
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Promotional Policies
Bibliography
American Marketing Association. (2009). Marketing. AMA
Resource Library: Dictionary. Retrieved February 20,
2009, from http://www.marketingpower.com/%5flayouts/
Dictionary.aspx?dLetter=M
Bridges, E. & Briesch, R. A. (2006). The "nag factor" and
children's product categories. International Journal
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Beverages Associations guidelines on marketing to chil-
dren. Retrieved February 24, 2009, from http://www.
thecoca-colacompany.com/citizenship/icba.html
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York: Routledge.
Suggested Reading
Inman, J. J. & McAlister, L. (1993). A retailer promotion
policy model considering promotion signal sensitivity.
Marketing Science, 12(4), 339-356. Retrieved February
24, 2009, from EBSCO Online Database Business Source
Complete. http://search.ebscohost.com/login.aspx?direct=t
rue&db=bth&AN=4471790&site=ehost-live
Paley, N. (2005). Promotional strategies: Plan a total commu-
nications mix. In N. Paley, Manager's guide to competi-
tive marketing strategies (3rd ed.) (pp. 333-362). London:
Thorogood. Retrieved February 24 2009, from EBSCO
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Essay by Ruth A. Wienclaw
Dr. Ruth A. Wienclaw holds a Ph.D. in industrial/organizational psychology with a specialization in organization development from
the University of Memphis. She is the owner of a small business that works with organizations in both the public and private sectors,
consulting on matters of strategic planning, training, and human/systems integration.