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Basic Concepts in Market Dynamics

9. Using Maintenance Promotion

The first two categories of promotional tactics discuss how you establish your name in a market using institutional tactics and how you build a reservoir of potential customers, called your market share, using developmental tactics. Using institutional and developmental promotion, it is almost impossible to do anything which will ever cause harm to your business. Though it takes time to see the effects, both the short and long term results are positive conversion and growth.

This, however, is not the case with Maintenance Promotion. Misuse of this tactic can hurt your business. Maintenance promotion is a short-term tactic used to stimulate sales or exchange, by offering price or product attributes. The category includes all forms of public sales propositions, including such tools as catalogues, product description/feature advertising, price advertising, sales events or discount advertising. It is designed to stimulate the prospect to make a purchase decision, now.

The short-term goal of maintenance promotion is to deplete or shrink your market in the hope that most of this exchange results in sales of your products and offerings. There is a minor risk that providing feature or price information to your prospects can actually force the purchase decision to a competitor's offering, but the greatest risk is from maintenance advertising's long-term impact. This is the qualitative impact of the message this type of advertising sends.

In the case of sale price advertising of a limited time offer, the underlying message is that your regular prices are too high. This can educate the market to wait for the next sale or price reduction. To minimize this impact, you should always have a logical proposition for a sale. For example, a grand opening, inventory clearance or tenth anniversary creates a plausible limit and justification.

In the case of product promotion the dangers are more subtle. Here the risk is over exposure of a non-representative or limiting offer. Yes, it is important to tell your market what you sell, but unless you have nothing more to offer, make certain that you do not continuously repeat the same product or message. Mix them up so you do not become too closely associated with a single item or price point and so as to establish your business as a source for all products in category and not just one.

The key here is that maintenance promotion should be applied with great care and always balanced by a higher ratio of institutional and developmental tactics. Next we will look at distribution.

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