• Promotion gives the consumer information and knowledge about the rest of the marketing mix.
• Without it, consumers would not know about the product, the price it sells for or the place where the product is sold.
• However, advertising does not necessarily increase sales and profits

Promotion aims to:

• Create brand image
• Establish loyalty
• Brand
• Increase sales
• Cooperate
• Compete
• Introduce new products
• Inform people about particular issues

Promotion includes:

• Advertisements e.g. TV, magazines
• Promotion (short term incentives to increase sales) e.g. coupons
• Personal Selling e.g. sales representative sent to talk directly to customers
• Public Relations (awareness on a large scale) e.g. conferences

Advertising Process

1. Decide on the purpose or objective
2. Decide the budget (how much to spend on advertising): this is often done by predicting how much sales will be in the future and then spending a certain percentage of the predicted sales on its advertisement- the budget may be set in line with competitors or just on how much the company is willing to spare.
3. Create a campaign: choose target audience
4. Select media/medium: time, place, cost effective
5. Evaluate the effectiveness: changes in sales, image etc. Assess if the purpose of the campaign was achieved.

Types of Advertising

1. Informative: emphasis on giving full information about the product
2. Persuasive: persuade the consumer that they really need/want the product

• Both times, the target audience (potential buyers) must be kept in mind.

Advertising Methods

Design of Advertisements

• AIDA Model is often used to advertise expensive items which are not often purchased
• Products that are bought frequently/out of habit do not require it
• Target audience must be kept in mind

Advertising Agency

• Employed for large-scale national advertising

• They select the medium to be used, write the advert, design it and arrange for its display

• Often, feedback on the advert’s success will also be obtained

Arguments For & Against Advertising

Types of Promotion

• Promotion is used to support advertising and encourage new or existing consumers to buy the product

1. Price Reductions: reduced prices/money-off coupons. Encourages the consumer to try the product and become a regular customer.
2. Gifts: encouragement in the form of a package. The customer may continue buying the product even after the promotion has ended
3. Competitions
4. POS Displays/Demonstrations/Merchandising
5. After-sales Service: used to reassure customers after purchasing expensive products. This may make the customer buy from a shop that offers an after-sales service rather than from somewhere that does not.
6. Free Samples
7. Sponsorships
8. Trade Exhibitions

Advantages of Promotion

• Promotes off-season purchases
• Encourages new customers to try an existing product
• Encourages consumers to try a new product
• Encourages existing customers to buy a product more often or in greater quantities
• Discourages purchasing from competitors over your product

Factors Affecting the Type of Promotion Used

• Stage of the product lifecycle that has been reached e.g. new, well-established
• Nature of the product e.g. manufacturing goods, consumer goods
• Advertising Budget
• Cultural issues involved in international marketing e.g. literacy rate, income
• Nature of target audience e.g. local, international, national

Personal Selling

• Advertising is too impersonal and targeted towards a mass audience
• Personal selling tailors the firm’s message to the individual buyer
• Staff must be full trained
• Used when the exact nature of the product can vary e.g. property
• Discussion is required over specific requirements
• Price can vary depending on requirements
• Advice required
• If the product is costly, often reassurance is also necessary
• Used extensively when selling to other businesses or to a niche market
• Items may need to be individually tailored
• Negotiation may need to take place
• e.g. specialized machinery

Public Relations

• Concerned with promoting a good image for the company e.g. sponsoring events, public stunts, donations, press releases
• This is more based on ‘image advertising’ where the company’s name and image is promoted as well as its products
• These raise the public’s awareness of the company and increases the likelihood of their choosing the product over its competitors

Customer Service

• Customer service is concerned with keeping the customer happy by putting emphasis on making the customer feel important and creating a relationship upon trust, reliability and value
• It is always more expensive to attract a new customer than it is to keep an existing one
• Therefore, companies strive to retain their existing customer base
• The product must stand out from its competitors- product differentiation- and good customer service is one way to achieve that
• Good customer service: