Promotion Slides

Higher Business Management The Marketing Mix - Promotion

Promotional Strategies A promotion is any form of communication used in an attempt to draw attention to a product or service An organisation may promote its product/service to gain new customers or to retain existing ones

Aims of Promotion Persuading customers to buy a product - using a celebrity to endorse the product, comparing the product with another similar product or even using sex appeal Informing customers about the product - providing information about the product or service e.g. smoking kills Reminding customers that the product still exists - saturating advertising spaces in a variety of ways – bill boards, TV, magazines, newspapers etc

Types of Promotion Above the line - independent media such as TV and newspapers, enabling businesses to reach large audiences easily - sometimes the promotion can be wasted Print media : Newspapers Magazines OUTDOOR media : POSTERS BILL BOARDS TRANSPORT BROADCAST media : TV RADIO CINEMA INTERNET

Types of Promotion Below the line - directly controlled by the business e.g. sales promotions, direct mail, trade fairs and personal selling - allows businesses to target the consumer they hope will be interested in their product more directly

Promotion Advertising Sales Promotion Public Relations Exhibitions & Trade Fairs Merchandising Direct Mail Personal Selling

Advertising Informative Advertising - used to increase awareness of a product/service and to inform the consumer about the product/service - for example: Yellow Pages Persuasive Advertising - aim to persuade a customer to buy a product by stressing that it’s very desirable to have - for example: Marks & Spencer (Food)

Advertising* Corporate Advertising - promoting the whole company rather than individual products - for example: BP – adverts do not try to persuade you to buy their petrol, but convey a ‘green’ image Generic Advertising - where a number of advertisers or the whole industry come together to promote the industry rather than individual products - for example: the Scottish red meat industry – Scottish lamb, beef, pork etc

Advertising Mediums Television Daily Newspapers Sunday Newspapers Local Newspapers Direct Mail Independent Radio Cinema Outdoor Media

Choice of Advertising Media The choice of advertising method will be affected by: Cost Target Audience Competitors’ Advertising Impact Required The Law (restrictions on tobacco advertising)

Controls on Advertising ASA - voluntary body set up to monitor advertising in the UK - adverts must be legal, honest, truthful and not cause offence ITC - body which controls advertising on TV and radio - restrictions include current newsreaders not being allowed to endorse products & actors not being used in commercials during programmes in which they appear

Controls on Advertising Pressure Groups - certain pressure groups seek to influence advertising e.g. FOREST who aim to defend the rights of tobacco firms to advertise Trade Descriptions Act 1968 - law states that the products must match the claims made about them in the advertising

Sales Promotion Sales promotions are short-term inducements used to encourage customers to react quickly and make a purchase Sales promotions can be given to the wholesaler/retailer or to the customer There are 2 main types of sales promotions…

Into the Pipeline Promotions Dealer Loaders Point of Sale Dealer Competitions/Bonuses Staff Training Sale or Return Credit Facilities

Out of the Pipeline Promotions Free Samples Bonus Packs Price Reductions BOGOFF Demonstrations Merchandising Competitions Coupons/Vouchers

Question (2007, Section 2, Q3c) Manufacturers use short term promotional measures to boost sales of products or services to retailers (into the pipeline promotions). Identify and describe 2 of these measures. (4 marks)

Solution Point of sale of materials Dealer loaders Sale or return Competitions Staff training Credit facilities Bulk buying discounts (Any 2 correct) Must include a description to gain the second mark

Question (2001, Section 1, Q6) Festive Bingo is a Private Limited Company with a 30% share of the UK bingo industry. They would like to increase admissions to 6000 per week if it moves to the new site. Suggest 2 promotional activities which could be aimed at their existing market segment. (2 marks) Describe what could be included in Festive Bingo’s marketing strategy to attract a new segment of the market? (4 marks)

Solution Class to discuss possible solutions…

Personal Selling Where satisfying the individual needs of the customer is paramount, personal selling is essential In some situations the customer’s needs can only be satisfied by personal contact between buyer and seller: - special advice is required e.g. insurance - where special benefits are required - where negotiation on price is required

Personal Selling It involves persuasive communication between buyer and seller It’s designed to convince the consumer to purchase the products or services on offer The objective is therefore to ‘make the sale’

Question (2004, Section 2, Q4c) Identify and describe 2 appropriate methods of promotion for summer holidays (4 marks)

Solution Advertising – pictures, dates advertised in magazines and newspapers Direct mail – information sent to customers who have used the company before, those who are thought likely to be interested Promotional pricing – price reduced for a short period of time, perhaps to encourage early booking Free child places – children offered free holiday places when accompanied by adults (Any 2 for 2 marks each)

Public Relations The activities of an organisation which help it improve its image locally, nationally and internationally Includes making donations to charities, event sponsorship, product endorsement, publicity materials, merchandising, press conferences and press releases Staff must also deal with bad publicity with the aim to create positive publicity

PR Manager/Officer Arranges press conferences Deals with any bad publicity Issues press releases Organises charitable events Liaises with celebrities regarding their endorsements

Question (2001, Section 2, Q4c) Errors do sometimes occur in manufacturing e.g. a supermarket is unhappy about the quality of one batch of lasagne which has been distributed throughout the UK. Explain the role of the Public Relations Officer in dealing with this situation. (5 marks)

Question (2003, Section 2, Q1b) Oil companies such as BP and Shell see creating a good reputation as an important objective. Describe the role of the Public Relations Officer in achieving such an objective (5 marks)

Solution Organises PR activities Prepares Press Releases Organises Press Conferences - provision of free products to those attending Responds favourably to criticism Organises donations to charities Sponsorship Organises Office/Platform/works tours

Publicity Within the organisation by the company itself through press releases or public announcements Outside the organisation through news reports or through consumer programmes or publications Not usually paid for by the organisation, but can become advertising for the business if it is good publicity

PR and Publicity Together PR and Publicity can: Provide the public with information about the organisation Built confidence in the organisation and awareness of its products Develop goodwill in the community and present the organisation in a positive way Support and enhance other areas of the promotional mix such as advertising and selling

Question (2008, Section 2, Q1d) Describe the methods available to a Public Relations department to improve the image of an organisation. (5 marks)

Packaging* Shape and weight Protection Convenience Design Information Environmental Factors

Merchandising* An attempt to encourage the customer to buy at the point of sale in shops and petrol stations Display material like window displays, in-store posters will attract customers’ attention Lighting and smells can also affect consumers’ buying decisions (bright lights to suggest cleanliness and bakery smells to make the customer hungrier)

Question (2005, Section 2, Q5c) Explain why organisations choose to spend large sums on money on marketing. (5 marks) Other than altering prices, describe 2 methods of promotion which are used by organisations. (2 marks)

Promotion Slides

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Promotion Slides