Higher/Intermediate 2 Business Management

Promotion

What is Promotion

• Promotion is the process by which people are encouraged to buy an organisations product / service.

• Promotion exists for a number of reasons• Inform• Persuade• Remind

Different methods of Promotion

• “Above the line” - Promotion carried out through the mass-media

• “Below the line” – Promotion carried out without the use of the mass-media

•Mass Media = the main means of communicating to a large audience

Promotional Mix• Advertising (“Above the line”)

• Personal Selling (“Below the line”)

• Sales Promotion (“Below the line”)

• Public Relations (“Below the line”)

• Direct Marketing (“Below the line”)

Advertising

• The way that most organisations will promote their good or service

•Non personal

•‘Paid for’

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 (Types)

•TV•Radio•Cinema•Magazines / Newspapers•Posters / Billboards•Internet•Sponsorship

TV Advertising

• Most people watch TV - hard to avoid

• Advert breaks / Commercial breaks

• Programme Sponsorship

• Placement

• Costly, People may switch channel

Radio Advertising

• Commercial Stations funded by advertising

• Advertising forthcoming events / shows

• Local Advertising – Target Audience

• Cannot see product – relies on descriptions

Cinema Advertising

• Captive Audience

• Advertises forthcoming movies

• Products can relate to feature movie (targeted) – Kids – Toys

• High Cost

Newspapers / Magazines

• Can be targeted – Local / National / Specialist / Young / Old

• Widely available

• Can be cost prohibitive

Posters / Billboards

• Many locations – Side of roads, Buses etc…

• Length of exposure

• Short and Punchy – Messages need to be short and easily understood

Internet

• Becoming more and more popular

• Huge audience

• Banner advertising

• Pop ups can be blocked

Sponsorship

• Advertise name at Pop Concerts, Football Teams, Stadiums

• Effective in building recognisable name

• May put people off by association

“Below the Line” Promotion

• Personal Selling

• Sales Promotion

• Public Relations

• Direct Marketing

Personal Selling

• One of the oldest forms of promotion.

• It involves using a sales force

• May involve a “push” or “pull” strategy• Push – Encouraging to buy the product• Pull – Supporting retailers and providing

after sales service

Personal Selling

• Direct sales forces - Insurance and Finance

• Costs a lot of money to hire and train a sales force

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 ‘make the sale’the sale’

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(Manufacturer to retailer)

• Dealer Loaders (eg 6 for the price of 5)

• Point of Sale materials• Dealer Competitions/Bonuses• Staff Training• Sale or Return• Credit Facilities

Out of the Pipeline Promotions(Retailer to customer)

• Free Samples• Bonus Packs • Price Reductions• BOGOF• Demonstrations• Merchandising• Competitions• Coupons/Vouchers

Public Relations

• Building goodwill between a business and its customers

• Does this by:

• Putting across positive messages

• Changing negative opinions

Public Relations (cont)

• Think of the Glasgow Commonwealth Games Bid

• Can be very costly

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

Direct Marketing

• Direct Mail – “Junk Mail”

• Mail Order catalogues – “Betterware”

• Telemarketing – “Cold Calling”

• Magazine Inserts

Packaging*

Manufacturers need to consider:• Shape and weight• Protection• Convenience• Design• Product Information• Environmental Factors – recycling

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)