How to get the most from your Promotional Mix strategy with a limited budget

Since I have discussed briefly the 4 P’s in marketing in an earlier blog, I shall elaborate the “P” for Promotion.  (See, also, the many books on marketing by Philip Kotler of Northwestern Kellogg School of Business for more details.) I recommend that when drafting a business plan, to check off any point to see whether it applies or needs to be addressed. I myself revert to my business school notes whenever I start a project or new business strategy.  There are so many points to consider, and they are difficult to remember in one sitting.  Equally important is to realize that some of these promotional channels should be considered for a start-upImagesince they can be an inexpensive but effective means to promote your product.  The Internet Protocol has directly contributed to the price drops in several promotional channels.

Promotion is really about marketing communication: informing and persuading the “potential consumer” about the existence and quality of the product or the brand. If, on the other hand, you have identified the wrong target, then all your efforts to communicate the brand to that target will never bear any results, as stated earlier. The key to any marketing is accurately identifying your target.  Indeed, Google’s value as a company has been the reputation of accurately identifying its consumer whenever the search engine is applied.  And Google is one of many communication channels that any company can apply.The following is the breakdown of promotional mixes that you can apply to your start-up, with some being rather affordable:

1. Sales Promotion – This aspect of the promotional mix includes, but is not limited to, contests, free samples, prizes, etc., to increase consumer demand or interest in a product.  McDonalds, the best example, employs periodic sales promotions where customers can win cars or free food. Occasionally, you see downtown giveaways for a new product such as soda or coffee.

In the Internet world, you call them “freemium” packages.  One gives away for free the basic features, but charges a premium for additional storage or additional features.  Sounds familiar to handing out free soda?

2.  Advertising – In a world where there are over 650,000 apps for iOS, 500,000 apps for Android, how can any one app ever stand out in the Apple Store?  How can any mobile user ever know about an app in such competitive environment?  This market sector can be a great example where advertising would help.  Ads can at least show your target market the very existence of your product.

Classical advertising comes in the form of TV and Radio. Note that with the new technologies involving TCP/IP protocol, you can direct advertising to specific geographies when using the TV channel.  Time Warner and AT&T cable TV can direct their advertising by locations. Internet radio can also be market specific.

How about the price to place a 30 second ad during non-prime?  Nowadays it is practically a gift. With the proliferation of cable channels, one can place an inexpensive ad directed to a specific geographic audience watching a TV show costing no more than several hundred dollars for several slots.  The price to purchase ads on broadcast TV has dropped tremendously with the advent of hundreds of cable channels.  I have seen price points around $75 for 30 second ad slots, and, if the time slot is right, one can hit a sizable target market rather quickly to gain name recognition.

However it pays at times to be a smart advertiser to bolster fast sales.  Remember “Go Daddy”? It used TV advertising exclusively to establish brand recognition.  In the case of Go Daddy, even expensive time slots proved useful to increase its sales dramatically.

The next ad approach is the prevalence of the Groupon-type world.  The growth of that Internet application shows how inexpensive it is to broadcast information of a small restaurant in your zip code. And one is encouraged to stop at that restaurant with a coupon.

The last, but not least example, of an advertising channel now is the Facebook and Google  marketing models. Both apply the simple concept: whoever is searching, certain characteristics appear that have unique marketing opportunities. Facebook has an arsenal of data from its users in order to establish marketing profiles.

3. Sales Force – this promotional mix is very useful for hardware products.  I generally employ a salesman who would sell his own grandmother.  Note that a salesguy is not a marketing person.  He spends the majority of his time calling and outside office visits.  It is up to the senior management to direct the salesguy. But the senior managers have had established the groundwork to make the sales easier: the brand is recognized and ready, promotional materials are set, and there is a website. A sales force is expensive: you have an employee. Subject to bonuses and fringe benefits. But employing a salesguy makes solid sense for certain products: high priced cars, etc.

4. Public Relations -This promotional mix has been discussed in an earlier blog.

5. Direct Marketing:   This promotional mix includes cell phone messages, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional letters, and outdoor advertising. One should add tweeters and blogs as well in this group.  Most direct marketing programs have little or no cost to them if done in-house.   On the other hand, one can outsource a direct marketing with tweeters to “experts”, as an example, about the same cost as outsourcing your Public Relations announcements.

Look at these options above to get an idea of a promotional mix for your business that can be budgeted.  Products do not sell themselves: they have to be marketed. I highlighted some inexpensive programs that work for a start-up so that it can start to promote its products with limited capital. I have used them myself.  And I find that many technology start-ups believe the product sells itself — a misconception of technology gurus.  Frankly, there are too many competitors out there. Promotion is the best way to boost the sales of any product.


About Juan Ramón Zarco, SVVGP 胡安•雷蒙•扎尔科

Juan Ramon Zarco, 胡安•雷蒙•扎尔科, Silicon Valley Ventures Growth Partners llp, Hygieia Healthcare Technologies Company, AllRest Technologies LLC, Crimson Growth Partners LLP,, is an experienced as CxO, General Counsel and Secretary to public and private companies with global operations. Established track record of producing practical, revenue-focused solutions. As Counselor and Secretary, demonstrating vision, integrity, and sound business judgment, to CxOs. Managed complex, strategic transactions, M&A, contracts support, PE Financing, IPO, SEC compliance, Corporate/HR governance, IP licensing, Budgeting, Staff, outside counsel management, International market access strategies, Domestic & foreign government relations and advocacy. Creative in designing and implementing market access strategies. Practices law beyond conventional model with low-overhead and project-based fees. Effective at managing departments, formulating marketing strategies, balancing budgets, and implementing cost-saving measures. Extensive in-house and private practice experience, advising clients on commercial, corporate, international business, and technology law and policy.; For Sprint, he managed iDen international development in Southeast Asia, Middle East, and Africa, and contractual issues with Verizon. In Private Equity, he worked with Pegasus in vetting international investment deals and interim President for portfolio companies, such as Data Foundation, a data storage company, handling marketing, strategy, fund raising, and accounting. Before Pegasus, Mr. Zarco, as CLO and V.P. of Corporate Development, played a principal role in the structuring, international expansions for 2 telecom companies, U.S. Cable Group and Viatel, Inc. in financing and M&A deals exceeding $200 million. Mr. Zarco earned a J.D. from NYU Law School, M.B.A. from Cornell, and B.A. from Williams College; is fluent in Spanish, Portuguese, French, and German, with working knowledge of Russian, Arabic and Japanese.
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