MM - Promotion

Question 1

Define promotion

Answer 1

Promotion is the attempt, through various forms of media, to draw attention to a product and thereby gain and retain customers.

Question 2

Define above-the-line promotion

Answer 2

Above-the-line promotion is through independent, mass media, which is indirect and allows a
business to reach a wide/large audience.

Question 3

Methods of above-the-line promotion

Answer 3

• (Regional) television – reaches large audience but expensive
• (Local) newspapers – can be kept but may be ignored
• (Local) radio – cheap broadcast media but limited coverage – limited audience
• (Local) magazines – targeted – colour – kept long time – but limited coverage
• Billboards – eye catching but easily missed in busy traffic
• Cinema – local/captive audience – can be ignored
• Website / Internet – cheap to operate – wider market – may be expensive to set up

Question 4

The choice of media used depends on - promotion

Answer 4

• Target market – who is the business trying to sell to?
• Whether the objective is to convey information or another type of message – will the product sell only when consumers fully understand its function, or do people buy on impulse?
• Cost – for many small businesses this is the first question they ask about any form of promotion.
• The reach of the media – who reads the magazine or watches the adverts? Are they likely to buy the
  product?
• The product itself – is the product suited to a certain type of promotion? For example, is the best way to promote plastic food containers through personal
  selling door to door or by an advert in the local paper?

Question 5

Define below-the-line promotion

Answer 5

These are often used to support above-the-line promotion. Below-the-line promotion targets consumers directly.

For many consumer products, below-the-line promotion is used only for short-term periods. Offers and promotions come and go quite quickly. However, for other products, such as industrial goods, producer goods and financial services, personal selling plays a
long-term strategic role in establishing a relationship
with the customer

Question 6

Methods of below-the-line promotion

Answer 6

• Direct mailing – may be targeted – easily ignored
• Point of sale – close to customer – may not be seen by busy customer
• Merchandising/shop window – relevant to shop – passing trade – but this may be limited
• Exhibitions and trade fairs
• Flyers – will provide detail – cheap to produce – easy to throw away
• Personal selling
• Packaging
• Public relations (PR)
• Sales promotion.

Question 7

Objectives promotion

Answer 7

• To increase sales – to increase the revenue of the business by obtaining new customers and retaining existing ones. This will satisfy the shareholders and
  create retained profit for reinvestment into the business.
• Raise awareness – some potential
  customers may not have heard of their products and some existing customers may be unaware of new products that have been introduced.
• To target specific groups – aiming their promotion at specific sub-groups in order to encourage sales of particular products. For example, targeting children with the range of products that they have designed for younger customers.
• To try and beat the competition –
  they will attempt to try and persuade customers to switch to purchasing the business’ products and thereby increase their market share.
• To develop/improve the image of
  the company – this will raise the brand awareness and give people confidence in the company’s products. Corporate advertising.
• To reassure consumers after the
  products have been purchased – this attempts to build confidence in the product hoping that more will then be purchased at a later date.

Question 8

Factors impacting on the promotional strategy

Answer 8

• Product differentiation – many markets are highly competitive. It is important that promotion provides a method of product differentiation. The role of promotion is to differentiate its product in the market and make it stand out from the crowd. The focus here remains on those features, functions or benefits that may not be offered by a competitor or may not be offered so well, e.g. coffee brands can be differentiated through types of user – value for money or luxuriously expensive.
• The marketing budget available – it is normal to set a total budget for promotional activities based on the objectives of the business, the availability of cash and actions of competitors.
• The stage in the product life cycle – during the introduction and growth stages of the product life cycle there may be a more informative approach, in order to raise customer awareness. During the maturity and saturation stages a more persuasive approach may be adopted to reinforce customers’ allegiance.
• Cultural sensitivity – if a product is to be launched in a new international market or translated across markets, it becomes imperative to take into consideration local affiliations and sensitivities.
• The target market – the people who make up the target market need to be considered before committing to a promotional strategy, e.g. the younger generation, who are used to accessing information on a daily basis via their iPhones, may be targeted via the internet.
• Competitor actions – the promotional strategies a competitor uses need to be taken into account as well. If a competitor is about to launch a campaign that targets a segment of the population not previously targeted, then perhaps a business needs to react in order to protect market share