Difference Between Product and Institutional Promotion

Companies commonly use both institutional and product promotion over time. Institutional promotion, also known as brand building or corporate advertising, is used to develop the distinct brand image of your company. Product promotion is routinely used to attract customers to a product and increase their perception of its value.

Institutional promotion is used to convey your company's brand message to target customers. While it doesn't directly result in sales, the idea is that by promoting your company and its values, you appeal to customers that appreciate what you have to offer. Similar to the "Midas Touch" of the classic childhood fable, if you develop a strong reputation for your company and brand, you inherently increase the value of each product that bears your name.

Institutional promotion includes basic company image advertising, along with cause-related, advocacy and green marketing. Image advertising is used to communicate your distinct company values, such as best quality, community-minded, elite service, low cost or best value. Cause-related and advocacy advertising are used to connect your company to certain social or political causes and events. Insurance companies, for instance, routinely present messages encouraging people not to drink and drive. This is promotes public service and enhances their position as an insurance carrier. Green marketing is relatively new. It is involves efforts to let the market know what you do to promote environmental preservation.

The biggest difference with product promotion is that your message focuses on a specific product. While you can use your brand reputation to enhance the value perception of a given product, each product must have its own marketable qualities. Companies use a variety of attributes to position their products as unique, different or better than the competition. You can separate your product by promoting superior attributes, quality materials, advanced technology, new features or nutritional value, as in the case of food.

Promotion generally includes long-term product branding and short-term sales promotions. Long-term product branding is different from institutional promotion in that your goal is to communicate and then reinforce the value of your product to target customers. The goal is to increase value perception, attract more customers and ultimately, optimize revenue and profit performance. Short-term product sales promotions are used to generate initial interest in a product launch, to sell out excess inventory or to drive short-term cash flow.