What is a promotion?
In terms of career, a promotion refers to the advancement of the grade or position of an employee in a hierarchical structure. In marketing, promotion refers to another type of advancement. A sales promotion implies the characteristics – via advertising and / or a reduced price – of a particular product or service. Product promotions can also be classified as “sales” or “promotions”.
Key points to remember
- A promotion can refer to the advancement of an employee’s position, awareness of certain product offers or the creation of buzz around little-known stocks.
- Promotions are applied frequently in the marketing industry.
- The term is used differently in different contexts, the most popular being job promotion.
- In investments, a promotion raises awareness of little-known stocks in the hope of increasing demand and the price of the stock.
Understand the different types of promotions
A promotion is usually given to an employee who has performed exceptionally well or has developed the skills and knowledge to take on additional responsibilities. In the latter case, the employee may need to work for a company for a period of time required to be eligible for promotion.
For example, a person starting out as an analyst in an investment bank may have to complete three years in this role before being considered for progression to an associate position. A promotion will generally provide a higher salary to compensate for the increase in professional responsibilities. A promotion can also include extended benefits and managerial power over other employees.
A promotion is a term used in different contexts; two popular uses relate to promoting a job and promoting a product for marketing purposes.
Promotions and product sales
Another area where promotion is frequently applied is that of marketing. In marketing, a brand, a company, a product or a service uses promotions to increase or improve the perception of the promoted asset and to increase sales. Promotional tactics span the gamut, from coupons to “two-person” sales (buy one, get a second for free), dollar markdowns or percentage discounts.
Sales promotions are carried out through online media such as social media platforms, digital communications such as mobile SMS, print media such as newspapers or in a physical location such as a retail store. Other ways to promote a business or product include word of mouth, business cards and flyers.
The financial markets also use promotions. Stock promotions are done when an individual or group wants to hype a stock. Unfortunately, capital market equity promotions are mostly fraudulent schemes implemented by people who already hold stocks in their portfolios. These stocks are generally priced very low and come from little-known companies with no solid financial foundation.
If the promoter’s tactics work and more people buy the stock, the value of the stock will increase. When this happens, the stock promoter sells or transfers all of his shares to the market in a classic pumping and emptying style. Stock promoters use a variety of vehicles to promote the stock, including online advertising, cold calls and electronic spam. Investment promotion refers to raising awareness of little-known stocks to increase demand, and therefore the price of stocks.