Promotion Definition

What Is Promotion in Business and How Does It Differ from Advertising?

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Promotion Definition

Business promotion is communicating with the public in an attempt to influence them toward buying your products and/or services. Generally we promote our businesses, our products, and our services by trying to bring them to the forefront of our target audience's attention in the hope that they will act as we want them to (i.e. see our product; want to buy our product). You might promote your business, product or service in person through direct selling or in a retail store, via the internet through a website or social media platform, electronically through email or text messaging (SMS marketing), just to name a few of the more popular business communication channels, but it's the intention to influence the consumer that defines promotion and sets it apart from other communication with customers and/or clients.

Promotion Definition: Promotion and Advertising Are Not the Same 

The words promotion and advertising are often used interchangeably, but they're not the same thing.

Advertising is one specific action you could take to promote your product or service. It's one type of promotion. (See the examples of business promotion below for other types of promotion that small businesses commonly use.)

Promotion, as a general term, includes all the ways available to make a product and/or service known to and available to purchase by customers. Someone starting a business, for instance, might ask themselves how they're going to promote their products or services; advertising would be one of the ways although of course there are many others. (See The Marketing Plan Section of the Business Plan for how advertising fits into the promotional mix.) An ad on a bus shelter is promotion. So is a marketing campaign or offering a discounted price for a set amount of time.

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. Businesses also often create or buy promotional merchandise, products that often have been branded with a company's logo, to give away at events such as trade shows or as thank yous to customers.

Promotion Definition: Examples

  • Word of mouth is considered by many to be the most effective way to promote a business, and best of all it is free. Studies have shown that over 90 percent of consumers use recommendations from friends or family when choosing products or services. Businesses that consistently go the extra mile to provide superior customer service rely on word of mouth over other forms of promotion. Actively asking for referrals is one way you can speed up the word of mouth process.
  • A professionally-designed website can be an excellent promotion tool, allowing businesses to inexpensively post up-to-date information on products and services. Most businesses that do not normally promote through the web still have simple websites containing basic information about the business (contact information, directions, etc.) (Don't have one for your business yet? Here's why Your Small Business Really Really Needs a Website.)
  • Social media is a popular, inexpensive form of online business promotion. Facebook, Twitter, and YouTube can be effective in reaching customers (see How to Create a Social Media Plan, How to Create a Fan Page on Facebook and How to Promote your Business on Twitter). If you are skilled with taking video (or know someone who is) you can record video promotions of your products or services and post them on YouTube. Influencer marketing is another increasingly popular form of promotion through social media.
  • The "Elevator Pitch" is used by business people to give a short two or three sentence description of what their business does and how their products or services might benefit the potential customer(s). Not comfortable doing this? Learn How to Tell Prospective Clients What You Do.
  • Business cards are still one of the most commonly used forms of business promotion, even in the digital age. In fact, in Asian countries exchanging business cards has become a ritual. All types of business documents are used for promotional purposes as well; letterheads and email signatures typically contain the company logo and promotional tag line.
  • Vehicle Decorations (wraps) are hugely popular for business promotion - almost every business vehicle on the road today is used as a mobile billboard, with professionally-designed business logo, tag line, and contact information. The Outdoor Advertising Association of America estimates that a single vehicle wrap can generate 30,000 to 70,000 views per day (depending on the locale, population size, etc.), making it one of the most inexpensive ways to promote your business.
  • Flyers may be old fashioned but can still be highly effective promotional tools. A service company performing work at a residence in a neighborhood can easily drop flyers into neighboring mailboxes. For example, a painter, roofer, or landscaper who does an excellent job on a house or building can (in addition to the obvious quality of his/her work) further promote their business by having flyers available to interested parties.
  • Hosting or sponsoring charity events is a great way to get a business known in the community.

Also Known As: Promo. Often confused with advertising or marketing.

Examples: Contests and advertising are two examples of popular promotion activities.