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)
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