A-Level Business Unit 3.4 - Promotion (Year 1/AS AQA Slides)


Learning Outcomes

- Marketing mix decision: using the marketing mix

- What you need to know:

  • the influences on and effects of the changes in the elements on the marketing mix
  • decisions about the promotional mix
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What is Promotion?

- Promotion is the process of communicating with customers or potential customers to increase sales through various methods, not just advertising

- A business may have developed an excellent product but if nodoby knows about it, then the firm will fail to generate sufficient sales revenue.

- There are two main forms:

  • informative promotion has the aim of giving consumers information about the product to increase consumer awareness of the product and its features
  • persuasive promotion has the intention of encouraging consumers to purchase the product emphasising the product's brand and benefits to the consumer
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Types of Promotion

- Above the line promotion: all types of advertising through various different media including newspapers, magazines, television, radio, the cinema, online and billboards/posters

- Below the line promotion: all other types of promotions used by a firm, such as sponsorship, sales promotions, public relation (PR), merchandising, direct marketing and personal selling

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What is Promotion Trying to Achieve?

- Inform the consumer e.g prices, location, product features

- Create awareness

- Build a brand image

- Create customer loyalty

- Pursuade the customer to purchase the product for the first time or more regularly

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The Value of Branding

- Branding is the process of builiding an image that helps to differentiate a product from its competitors through a recognisable names, sign, symbol, design or slogan linked to that product

- Firms can spend many years building their brand at great expense. The main benefits include:

  • higher demand and sales
  • helps maintain market share and helps product to stand out from competition
  • ability to charge higher prices and maximise profit margins
  • brands create customer loyalty and makes products more price inelastic
  • brands give value to the business
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Promotion Methods

- These are the range of promotion methods available to businesses:

  • advertising - paying for a message to be shown through various media, such as television, radio, magazines, newspapers. it can be expensive
  • sponsorship - providing financial assistance to an individual, event or organisation in return for exposure and advertising
  • sales promotions - short-term sales initiatives to boost sales, for exmaple, various offers such as 'buy one get one free' (BOGOF), competitions, collect the tockets, loyalty cards, credit terms and coupons
  • public relations - creating a favourable image of the company without paying for advertising, for example, launch events, favourable reviews and news stories, celebrity endorsments, product placements on TV and films, trade fairs, exhibitions, etc
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Promotion Methods

  • direct marketing - sending messages directly to a known consumer; often used alongside a database of customer details through methods such as letters, emails and phone
  • personal selling - using specialist sales staff to speak directly to consumers
  • merchandising - point-of-sale displays and products with brand image on
  • websites, banners and pop-ups
  • social media, for example, Facebook pages, Twitter, Youtube, etc
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What Influences Promotion Methods Used?

- What is the business trying to achieve, for example, informative or persuasive? Boost sales or build brand loyalty?

- The promotion budget available and the cost of methods

- Target audience and the best way to reach them

- Customer expectations, tastes and fashions

- Brand image of the company

- Methods used by competition

- Methods complimenting one another

- Legislation, for example, cigarette companies and companies making unhealthy foods face restrictions in the UK on where and when they can advertise

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AIDA Model

- All good promotion methods should fulfil all of the criteria of the AIDA model to be effective

A - Attention: attract the attention of the customer with exciting and interesting messages

I - Interest: raise customer interest by demonstrating the benefits of the product to the consumer

D - Desire: convince customers that they desire the product and that it will satisfy their needs

A - Action: lead customers towards taking action and/or purchasing the product

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- Promotion is a key part of the marketing mix that helps a company establish its position in the market

- It allows them to build a brand, which will differentiate them from rivals, build customer loyalty and create price elasticity

- However, as prolific investor Warren Buffet has said: 'It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.'

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