The marketing mix - OCRPromotion

Businesses use promotion to:

• inform consumers of a new product or service
• persuade consumers to buy a product or service
• remind consumers about the benefits of a product or service

To do this, a business will use a range of promotional methods, that can be separated into point of sale or advertising.

Point of Sale Promotion

Point of sale promotions are designed to persuade consumers to make a purchase by offering an enticement where the purchase takes place. There are a number of ways this can be done:

Price reductions

Reducing the price of a product, usually for a limited time, is designed to attract new customers. These may be people who would not usually buy the product, or to tempt those that usually buy a competitor’s product to switch. Price reductions are also used to sell old stock to make way for new products.

Loss leaders

A loss leader is a product that has had a price reduction that is so significant that it is being sold at a loss. It might seem strange to sell products for a loss, but loss leaders are often used by retailers such as supermarkets in order to tempt people into store. Once there, the hope is that they will buy other products, enabling the business to make a profit on the whole transaction.

Competitions

Running competitions with high value prizes can also be used to increase sales by encouraging people to buy a product. The temptation to buy a small-value item, eg a bottle of water, to have a chance of winning a luxury holiday or a car does encourage the purchase of more items.

Free samples

Providing a free sample of a product will give consumers the chance to try a product. The hope is that those who try it will like it so much that they will go on to make a purchase. Free samples are commonly used to promote new fragrances, or to tempt people to try new food or drink products in supermarkets.

Advertising

An advert is a paid-for message designed to influence consumer purchases. Adverts do this using emotive language, which is designed to make people feel a certain emotion, including excitement, sadness or fear. For example, ‘buy it now before it’s too late’ creates a fear of missing out.

Types of media that can be used for advertising include:

• social media
• websites
• print, eg newspapers and leaflets
• television
• radio

Social media

Businesses use social media to post information about their products, run competitions and interact with customers. By encouraging those interested in their products to follow their social media activity, a business can quickly and cheaply build up information about their customers. Producing content that appeals to users enough for them to share it via social media may also lead to successful viral marketing.

Websites

Having a website enables a business to share more detailed information about their products, as well as ways in which people can get in touch with them. In addition, website owners can track the online activity of consumers who visit their site by using cookies. They can use cookies to build a profile of consumers’ interests. They can then serve adverts for products suited to the individual consumer.

Print

Print media refers to newspapers, magazines and leaflets. These can be particularly useful places to advertise if a business wants the advert to be seen by a specific target audience:

• Newspapers can be both local or national, so geographical areas to be targeted. In addition, different newspapers are read by different types of people, which can be useful if a business knows which market segment it needs to appeal to.
• Magazines contain content that will appeal to people with particular interests. If a business wants to appeal to people with those interests than magazines can be a very effective way to advertise, eg a computer manufacturer is likely to advertise in computer magazines.
• Leaflets are a cost-effective form of advertising, and are particularly useful for smaller, local businesses who can use them within the local area to trial offers, eg money back on a purchase

Television

Advertising on television enables a business to reach a large audience across a large geographical area, either regional or national. It can also enable groups of consumers to be targeted by carefully selecting the times and programmes that the adverts will be shown during. However, television advertising can be very expensive, as in addition to paying the television companies for the broadcasting time, an advert has to be written and produced. For this reason, TV advertising is usually used by large businesses who have many customers.

Radio

Radio advertising enables a business to reach a large audience, and can be national, regional or local, allowing a business to choose an appropriate geographical area. Although not as expensive as television advertising, radio adverts rely on verbal communication, which can be difficult for businesses trying to promote a product that they cannot be seen on a radio advert.

Building a promotional strategy

A promotional strategy combines some or all of the above promotional methods to reach the target audience.

The promotional strategy will depend on the size of the business, how much the business has to spend on promotion, and the market segments that it is aiming to reach.

A good promotional strategy for a small local gardening business might involve advertising using printed leaflets combined with an introductory discount for new customers. This strategy would target people living in the local area, who would be the most likely to become customers.

A poor promotional strategy for a small local gardening business might involve advertising on national TV combined with sponsorship of a local gardening competition. TV advertising is very expensive so it is rarely used by small businesses, and there would be little point in a small local business advertising nationally.