Edexcel A2 Business

1.3.2 Branding and Promotion

Revisionstation

Worksheet

From Edexcel

a) Types of promotion

b) Types of branding

c) The benefits of strong branding:• added value• ability to charge premium prices• reduced price elasticity of demand

d) Ways to build a brand• unique selling points (USPs)/differentiation• advertising• sponsorship• the use of social media

e) Changes in branding and promotion to reflect social trends:• viral marketing• social media• emotional branding

Starter

• Are you interested in buying any of these products? Have a look at the next slide too…

Starter

• How about these?

Starter Discussion

Do all products have the same customers?

How many ways can you think to segment customers? e.g. Age

Does the type of customer affect the way we “speak” to them through marketing?

Definition of promotion

• The use of marketing tools to bring a product or service to the attention of potential buyers

Types of promotion

Personal selling

• Personal selling is an effective way to manage business to customer relationships

• The sales person acts on behalf of the organisation

• Sales people are well trained in the approaches and techniques of personal selling

• However, sales people are very expensive; salary, training, commission

Personal selling

• For example salesmen and saleswomen are often used to sell cars or home improvements where the profit margin is high

• Sales people are useful where the product comes with a range of features which need to be explained or “upsold” e.g. a tech pack on a new car

Examples of extra packs for a Range Rover

which would need to be explained and “sold” to

a customer

Discussion

• What types of products or services would need personal selling?

Direct marketing

• Highly focussed targeted mail based on what customers have bought before

• Can be e-mail or by post

• May be special offers to re-engage customers who have stopped buying

• Carefully tailored to items that customers have bought before e.g. holidays, hotels, travel deals etc

Notice use of “your” to personalise the deal

Your

Above the line advertising (ATL)

• Advertising to a mass audience;• TV adverts

• Online adverts

• Cinema adverts

• Daily Newspaper adverts

• Advantage:• Reaches a large audience

• Disadvantage:• Very expensive to make an advert and air it – for example

an advert screened on Channel 5 is £17,000 every time its on, think how many times you see an advert

Below the line Advertising

• Below the line is more personal advertising to niche markets;

• It is used to:create awareness

communicate information in order to gain a response from the target market

Adverts in niche market magazines cost

less than advertising in mass market

magazines and newspapers

• Leaflets / flyers

• Posters

• Local Radio advert

• Billboard

• Web Site banners and pop ups

• Local newspaper adverts

• Taxi sides

• Magazines

• Brochures

• Local Magazines

• YouTube

• Facebook

• IPhone apps

Discussion

• Draw up two lists – one for ATL and one for BTL and discuss which products should go under each headings

Public Relations

• Public relations is also known as PR

• PR aims to build a relationship between the business and the public, to create a favourable corporate image

• PR is unpaid communication about an organisation which appears in mass media A private school can use events

which are then reported in the

local paper as free PR /

advertising

Public relations

• PR is a long-term not a short-term strategy

• PR is very low expenditure –e.g. a business could send its products to the local paper for a “review”

• PR gives the business less control over what is said BUT consumers find it more believable / authentic

Café “Heavenly Desserts”

teamed up with local artist

who painted the local area in

chocolate at the local

shipping centre

This was then also reported in

the paper

Sponsorship

• Positive association of the product with a celebrity or a sport

• Can be very expensive e.g. £125m

• Difficult to tell what impact this has on brand loyalty or sales

Sales promotions

1. BOGOFF

2. Price discounts

3. Money off coupons

4. Samples / giveaways

5. Special events

6. Point of sale

1. BOGOF

BOGOF stands for buy one get one free

In a BOGOF sales promotion a business offers one item free when another one is bought

Used to encourage customers to go into the shop or buy the item

Advantages Disadvantages

Very popular with shoppers Encourages trial and use of the product Good way to encourage shoppers to switch from

their normal brand Boosts sales, therefore sales revenue will increase

Loss of profit because there is an increase in costs, this will not be balanced by the increase in sales

Only useful in the short-term

2. Price discounts

Price discounts means that the normal RRP (recommended retail price) of the product or service has been reduced

Advantages Disadvantages

Great way to clear old or out-of-date stock Customers may regard the business as a cheap option Too many discounts and customers become suspicious

e.g. the DFS sale that is always on

3. Money off coupons

Coupons can be used to capture new customers – to add an incentive

Coupons can also be used with existing customers to encourage an impulse spend

Companies like BZZ agent give out coupons in return for reviews

Advantages Disadvantages

Coupons can help the customer feel they are getting better value for money

Coupons are available from websites, loyalty cards, store magazines and on the back of some packs to encourage repeat purchase

Reduced profits from the cost of running the promotion

Some customers may be waiting for the coupons before they purchase

Customers may have been wanting to make a purchase anyway

4. Samples / giveaways

This is where a business may send out or give customers free samples in order to persuade them to try the product for the first time

Giveaways may occur on the front of a magazine e.g. matchattax cards on a football magazine

Advantages Disadvantages

Ideal for new product launches Works especially well with some products e.g.

shampoo, food etc. Encourages word-of-mouth promotion

Can be complicated to send in the post – needs a database of customers

Can be expensive as giving away some of the product for free

5. Special events

Special events are activities that the business does to encourage consumers to try the product

Events can be; shows, fetes, fairs, or an events at the business e.g. a special tasting evening at a restaurant

Advantages Disadvantages

Encourages customers to attend Rewards loyal customers with a

special event Ideal for small businesses

Can be expensive Hard to measure how valuable this

marketing is

6. Point of sale

Point of sale display is usually a cardboard display stand located close to the till within a shop

This is to draw customer attention and trigger an “impulse” purchase

Advantages Disadvantages

Ideal way to promote new products Works best with products that have an event or

holiday tie in e.g. crème eggs for Easter Manufacturers can add extra punch to the

promotion by giving a discount

Only successful if the product meets the needs of the customer

Needs to be designed and out to stores in time for the event / holiday

Displays may be put in poor locations by shops e.g. next to a broken till or one that is rarely opened

Digital communications

1. Online adverts

2. Mobile communications

3. “Advergaming”

4. Social media

5. Consumer generated content

6. Viral strategies

1. Online adverts

Online adverts include:

banner and commercial classified adverts -including adverts within emails

pop-up adverts

paid-for search listings

paid-for listings on price comparison sites

Advantages Disadvantages

Powerful ad management tools can deliver accurate data and statistics about effectiveness of the adverts

Potential to reach large markets of customers shopping online

Customers may ignore the ads Ads may get lost amongst all the content

and other ads Click through ads can be expensive

2. Mobile communications

Mobile communications includes smartphones, androids, tablets and other devices used on the go

Adverts may appear as text messages e.g. from O2

Adverts may also appear in apps

Advantages Disadvantages

Mobile marketing can be used to extend the online reach so that customers can interact with the brand whilst on the move

Doing m-commerce transactions do not require the users to plug in a computer or wait for the laptop to load

• Small screen the message may be lost or distorted• Security issues of conducting transactions online• Websites now need to be adapted to be mobile friendly

which can be an expensive process

3. “Advergaming”

An advergame is a video game which contains an advert for a product, service or business

It may also be a corporate website that contains a game which is designed to attract customers

For example in a car racing game the cars may pass billboards which are genuine adverts

Advantages

Customers will be concentrating on the game so are more likely to concentrate on the brand message

Many games are multi-player reaching huge audiences

Many consumers except that there will be adverts in games

If the game and the brand don’t make sense together the message is lost – wrongly targeting a game with car adverts for example

Many games are played by consumers too young to make a purchase decision

4. Social media

Social media advertising is free or low cost so very cost effective

All brands now need a web presence and can do this with social media marketing

Advantages Disadvantages

Customers can be kept informed of new products Increases customer engagement with the brand Can show customer service with a quick response

• Blogs, twitter, Facebook pages all need to be updated on a regular basis which means hiring committed staff – which is an additional cost

5. Consumer generated content

This means any form of content such as video, blogs, discussion form posts, digital images, audio files, and other forms of media that was created by consumers

Content has been made available to other consumers online

See article here

Advantages • Disadvantages

Opportunities for consumers to read reviews before they make the purchase e.g. Trip Advisor

Positive responses to complaints can be very valuable marketing and reputation enhancement for the business

• Consumers have lots of ways of publicly complaining about a product or service

• Not just about brands anymore, now about online reputation, which could be expensive to manage (hire staff)

6. Viral strategies

Viral marketing describes any strategy that encourages customers to pass on a marketing message to others, creating the potential for exponential growth in the message’s exposure and influence.

Like viruses, such strategies take advantage of rapid multiplication to explode the message to thousands, to millions - video

Advantages Disadvantages

Consumers spread the message amongst themselves which reduces costs and also increase authenticity of the brand message as it is endorsed by a friend

Can be so complex that the original message is lost

Still new idea so hard to get funding for this kind of campaign from some of the more traditional companies

video

Types of branding

Definition of branding

A brand is a characteristic name or symbol that distinguishes one product from another supplier

Manufacturer / corporate branding

• Corporate branding aims to build communications and relationships between the main business name and the customers

• The business may itself own a range of brands e.g. Nestle and Kitkat

• Business may use images and slogans to establish the brand

Manufacturer / corporate branding

Spreads the cost of marketing

across all the individual brands

Awareness of the company can be

worldwide e.g. Coca cola Takes a long time to build a solid brand

image

Any unfavourable incidents e.g. a product

recall and the whole brand suffers

Too much advertising exposure can cause

indifference towards the brand

Product branding

• A product branding strategy will aim to show the customer the features and benefits of a product which will differentiate it from other similar products in the marketplace

• This may include colour:

• Kitkat is __________

• Galaxy is ____________

• Dairy milk is ___________

Product branding

Product branding may require a high

investment

Product branding may take many years

to build up

Limited flexibility when the product tries

to develop new lines in the range beyond

what they are known for

Branded products can command

higher prices that non-branded

Businesses therefore can expect

higher profits from branded cash

cows

Good branding differentiates the

product and creates customer

loyalty

Own brand products

• Own brand or own label products are made by a manufacturer on behalf of a supermarket

• In ASDA the range is called _______________

• In Sainsbury's it is called

• _______________

• In TESCO it is called

• ________________

Own brand products

Boosts customer loyalty to the

supermarket

Competes with manufacturers

brands

Fills gaps left by the competitionStore brands are a mixed bag and

can be made by numerous

companies under the supermarket’s

name, so ketchup might be great but

cornflakes might taste like carpet

tiles

Rebranding

Rebranding is a marketing strategy in which a new:• Name

• Symbol

• Term

• Design

• Or combination of the above

Will be developed for an established brand with the intention of developing a new differentiated identity in the minds of consumers, investors and / or competitors

Rebranding example – old spice

• 2010 Old Spice a men’s body care range wanted to change from their traditional older customer to a new younger customer image

•

The benefits of strong branding

Added value

• A strong brand can add value to a product both for the consumer and for the business

• The kudos of having an apple iwatch for example

• The benefit for a business will be that the brand gains value that will help if it is sold to another company

Ability to charge premium prices

• When brands become household names – “I’m going to Hoover the house and then I’m going to write a letter with my Biro”

• They can then charge a premium price

• Consumers associate these Brandnomers with consistent quality and therefore will pay a higher price for them than a non-branded item

• Brandnomers – how many of these are a brand name?

• Chapstick

• Sellotape

• Sharpie

• Jacuzzi

• Velcro

• Jet ski

• Bubble wrap

• Onesie

• Band-Aid

• Post-it

• Tarmac

Reduced PED

• PED stands for price elasticity of demand

• PED measures the responsiveness of demand to a change in price

• PED can be either elastic or inelastic

• Products / services that have elastic demand are responsive to a change in price, this means if the business puts prices up, then demand will fall

Ways to build a brand

USP’s / Differentiation

• USP stands for unique selling point – these are the small details that makes one product or business different from another

• These USPs can be exploited to build the brand

• For example Amigo loans which lends to customers who can provide a guarantor who may have had problems getting a loan elsewhere

Advertising

• Brand awareness is a sense of loyalty between customer and the advertiser

• Customers purchase from brands they are familiar with

• In a supersaturated global market place consumers see 100’s of adverts every day

• To build a brand a business will need to use a mixed media approach e.g. print (newspapers) and digital (youtube adverts)

Sponsorship

• Association with a celebrity or sports star can result in increased brand recognition, awareness and perception

• Brad Pitt ______________

• Kanye__________________

• Beyonce _______________

• Rooney________________

Social media

• Another way to help build a brand is to engage with customers (followers) on social media channels

• Twitter can help build trust through engagement and interaction with customers

• A business looking to build a brand this way should look at what content their competitors are sharing, find out where their customers are online, and work out what role / content they can play

Changes in branding and promotion to reflect social trends

Viral marketing

• Viral marketing is method of marketing whereby consumers are encouraged to share information about a company's goods or services via the Internet.

• Iplayer audio (18 mins) on viral marketing

Viral marketing – video example

Discussion, watch the video then consider what makes a marketing campaign “viral”?

Social Media

• Social media can be used to build a brand

• Facebook, snapchat and Instagram are all popular social media sites that can help to build and promote products

• Sites can be used to show features and benefits of products which helps to differentiate itself from the competition

#sweeet

Emotional branding

• Emotional branding seeks to create a bond between the consumer and the product by provoking an emotional response to the advertising

• Long lasting attachment to a product is a strong brand loyalty

• Look at the examples on the next few slides – what kinds of emotions do they provoke?

Emotional advertising example

Emotional advertising example

Emotional advertising example

Emotional advertising example

Emotional advertising example

Sample Edexcel A2 questions

Case study for question 1

Sample question 1

Knowledge 4

Application 4

Analysis6

Evaluation6

Business terminology to try and use in your answer

Differentiation

Consumer recognition

Barriers to entry

Price elasticity of demand

Strong brand

Marketing mix

Distribution channel (place)

Answer sample question 1

How to level sample question 1

Case study for question 2

Sample question 2

Knowledge 2

Application 2

Analysis2

Evaluation2

Answer sample question 2

How to level sample question 2

Glossary

• Differentiation; How well a business can change the product so that a consumer recognises it as superior e.g. Audi / BMW German technology engines

• Consumer recognition; How well a business knows their customers, age, gender, lifestyle etc.

• Barriers to entry; How difficult is it to get into the market, e.g. Mobile phone market high technology so high barriers to entry, market stalls, easy to start so low barriers

• Price elasticity of demand; How much demand for a good or service is likely to fluctuate with a change in price e.g. petrol will still be demanded no matter what the price is, therefore it is inelastic in that demand doesn’t change by much with a price increase

• Strong brand; A brand that is recognised by everyone, e.g. Rolls Royce, Rolex, Ford, Chanel

• Marketing mix; Price, place, promotion and product, how a business uses these 4 elements strategically

• Distribution channel (place); Where a product is sold and how many stages it takes to get to a customer e.g. factory outlet = 2 stages: manufacturer > customer