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CHAPTER 21. THE MARKETING MIX : PROMOTION THIS UNIT WE WILL EXPLAIN : The role of promotion in the marketing mix The aims of promotion The advertising process Different types of advertising Different types of promotion THE ROLE OF PROMOTION Gives information about the rest of the marketing mix Essential for brand image Remember : advertising does not necessarily increase sales and profits PROMOTION INCLUDES… ADVERTISEMENTS PROMOTION PERSONAL SELLING PUBLIC RELATION THE AIMS OF PROMOTION Different Activities Same Purpose :raise awareness & encourage purchase Aim Of Promotion 1. Inform particular issues 2. Introduce new products 3. Compete with competitors’ products 4. Create a brand image 5. Increase sales 6. Improve the company image THE ADVERTISING PROCESS Set objectives Decide the advertising budget Create on advertising campaign Evaluate the effectiveness of the campaign Select the media to use QUESTION TIME Coca-cola is a very popular company with huge adverts all around the world. It’s adverts are played 24/7 worldwide. Question : Identify the aims of Coca-cola’s adverts. DIFFERENT TYPES OF ADVERTISING Advertising can be either persuasive or informative or have both elements. Informative Advertising Persuasive advertising The emphasis of advertising or sales promotion is to give full information about the product Advertising or promotion which is trying to persuade the consumer that they really need the product and should buy it TYPE OF ADVERTISING 1 TELEVISION Advantages Can go out to millions of people Shown in a very favourable way, makes it look attractive Reaches the biggest number of consumers Reach target segment easily. Disadvantages Very expensive TYPE OF ADVERTISING 2 RADIO Advantages Cheaper than TV Reaches a large audience Use memorable song or tune-remembered Disadvantages No visual image Quite expensive Not as wide as an audience on TV The advert need to be remember, radio isn’t the best method for remembering TYPE OF ADVERTISING 3 NEWSPAPERS Advantages Target their audience easily Many people purchase national newspapers Permanent & Can be cut out A lot of info. can be put into these adverts (informative) Disadvantages Not graphic –black & white Not attractive TYPE OF ADVERTISING 4 MAGAZINES Advantages Read by specific type of person Easy to reach target audience Coloured - more attractive Disadvantages Only once a month/week Usually more expensive than in newspapers TYPE OF ADVERTISING 5 POSTER/BILLBOARDS Advantages Permanent Relatively cheap Seen by everyone who passes them Disadvantages Can be missed as people go past them No detailed information TYPE OF ADVERTISING 6 CINEMAS Advantages Give image of the product Show the product in a positive way Relatively low cost Effective if target audience sees the advertisement Disadvantages Only seen by a limited number of people TYPE OF ADVERTISING 7 LEAFLETS Advantages Cheap Delivered to peoples houses Permanent & Kept for the future Sometimes contain money-off coupons Disadvantages People may not receive nor read leaflets TYPE OF ADVERTISEMENT 8 INTERNET Advantages A large amount of info. can be placed Can instantly order the product Seen by many people Disadvantages Limited Internet access OTHER TYPES OF ADVERTISING Neon signs -name of the product -city center / outside business Bags -name of the shop on them are given out with purchases Delivery vehicle -have the company name or product on their side QUESTION TIME Advertising Media Television Radio Newspapers Magazines Poster/Billboard Cinemas Leaflets Internet Others Advantages Disadvantages ACTIVITY (P302) Which type of advertising media should be used for…? A) A new bicycle has been produced which is sustainable for using over rough ground and for cycling up mountains. magazine B) A new restaurant in a small town is opened. local newspapers, billboards, leaflets etc. DESIGN OF ADVERTS When a designer of an advert creates an advert they follow the AIDA model: A – attention, consumers have to be made aware that the product exists I – interest, consumers need to be made interested in the product D – desire, consumers need to be made to want to buy the product A – action, consumers need to be prompted into action to buy the product QUESTION TIME Discuss how Coca-cola designs it’s adverts according to AIDA model. A- How do they catch our attention? I- How do they make us interested? D- How do they make us desire their product? A- How do they prompt us to buy Coca-cola? THE ROLE OF PROMOTION The aims of promotion in a business is to support advertising and encourage new or existing consumers to buy the product. Advertising is only used for short periods of time to give sales a boost. Promotion is never used for long periods of time. TYPES OF PROMOTION There are many ways in which a business can promote themselves. These methods include: Price reductions Gifts Competitions Point-of-sale & Display and demonstration After- sales services Free samples PRICE REDUCTION What is it? Price reduction includes a decrease in price of products and services. This also include money-off coupons which give discounts for now and the future. PRICE REDUCTION Advantages More likely to buy in bulk Encourages customers to come back Keeps customers satisfied Disadvantages Profit can be lost Can decrease the brand image of the product Discourages some people to purchase their products GIFTS What is it? Some large companies give away free gifts with there products. They are usually included with products like breakfast cereals. Business also include coupon exchange, which is the collection of a certain number of coupons for exchange of a free gift. GIFTS Advantages Higher probability of consumers buying your product/gift Consumers are more likely to become consistent in buying the product Beyond customers expectations Disadvantages Consumers will now have high expectations Consumers may only buy your product once for the gift COMPETITIONS What is it? Again large companies mainly use this method. Companies include entry forms for competitions on there products. The prize is usually something expensive like a car, which attracts customers easily. COMPETITIONS Advantages Product should sell rapidly when competitions are involved Prize easily attracts consumers Disadvantages Product sales may drop once competition is over POINT-OF-SALE DEMONSTRATION What is it? This occurs when a product is being displayed in a special way. The product will be used in a ‘demonstration’ situation. Showing consumers how the product looks and how it is used. This usually occurs with food products. POINT-OF-SALE DEMONSTRATION Advantages Consumers are more likely to impulse buy Product image becomes clearer if it previously wasn’t Disadvantages Time consuming for consumers to watch Can be expensive AFTER-SALES SERVICE What is it? After-sales services mainly talks about refunds and exchanges. If after-sales services is offered to consumers it reassures them that they are able to refund the product. If a business doesn’t include after-sales services people may not want to buy your product. AFTER-SALES SERVICES Advantages Reassures customers and will increase impulse buying because refunds and exchanges are possible Will give the business good brand image Disadvantages Profit can be lost Products may loose quality FREE SAMPLES What is it? When free-trials/samples of the product are given to consumers whom are interested in buying the product. Free samples aren't given to everybody only to the intended audience. If free samples were given to everybody the business would loose profit. FREE SAMPLES Advantages Encourages consumers to buy the product if they liked the free sample Free sample of product can be delivered to houses for free Disadvantages Business can loose profit if consumers don’t like the product CASE STUDY EXAMPLE (P305) Dolly Dee sell a range of dolls for young children. A new doll has just been introduced that will eat special food provided with the doll. To show children what the doll will do, a representative of the company is visiting toy shops to demonstrate the doll. Also, with each purchase of the new doll there is a chance to enter a prize draw – the first prize is a trip to Disneyland. OVERALL ADVANTAGES OF PROMOTION Promote sales when sales are low (off-season purchase) Encourages new customers to try a product Encourage consumers to buy a new product Encourages existing customers to buy a product more often in greater quantities Encourages customers to buy a product instead of a competing brand WHICH TYPE OF PROMOTION IS IDEAL? When a business wants to decide which type of advertising to use they must consider the following: The stage of the product life cycle it has reached The nature of the product The advertising budget The culture issues involved in international marketing The nature of the target market THE STAGE OF THE PRODUCT LIFECYCLE THAT IT HAS REACHED What does this mean? This basically means if the product its adverts will be informative. However if the product is quite old or older its adverts will aim to be more persuasive. THE NATURE OF THE PRODUCT ITSELF What does this mean? This means you need to consider the method of advertising that is best suited for the PRODUCT itself. Not all products will be promoted in the same way. Example: A wrapping machine & A perfume The advertising for the machine will be informative, and the perfume persuasive. THE ADVERTISING BUDGET What does this mean? All businesses will advertise according to their budget. If there budget is small then advertising on television is not ideal. But if the budget is large then television is a good option. The budget should be spent carefully as most businesses can’t afford to over-spend. INTERNATIONAL MARKETING CULTURAL ISSUES What does this mean? When advertising abroad it is crucial to consider which method of advertising which is most appropriate. Example : no point in advertising products in TV if most of the population don’t have them. Some countries – NO alcohol advertisement THE NATURE OF THE TARGET SEGMENT What does this mean? This basically means that a business needs to decide: Where the product is sold Is the product specialist or not? decide local, national or international. When these decision have been made the method of advertising will be easier to choose. ACTIVITY (P307) In your notebooks, write down five products that you are familiar with. Now decide what type of promotion(s) is used for these products. ACTIVITY (P307) For each of the following five products decide the best method of promotion to use. A) B) C) D) E) A new magazine aimed at teenage boys. A new type of pen which is very comfortable to use and does not smudge. A company making a famous brand of football boots want to expand sales A new fast food takeaway opens in a small town A soft toy has been invented that changes colour when hugged. PERSONAL SELLING Customers discuss their requirements Price can vary Advice on appropriate service Expensive product Selling to other businesses Large order – discounts negotiated Trade fare PUBLIC RELATIONS Promoting a good image Donating products to charity Raise Awareness & Public choose the company’s product QUESTION TIME In pairs or groups discuss the difference between public relation and personal selling. In public relation, which of the following brands are likely to be used to support a football match? A) LG B) Oishi C) Nokia D) Seventeen magazine CUSTOMER SERVICE Objective : retain its customer base Good customer service gives extra value to the product CUSTOMER SERVICE 1 GIVING ADVICE ABOUT THE PRODUCT Result in repeat business and positive comments CUSTOMER SERVICE 2 DELIVERING GOODS FOR CUSTOMERS More convenient for customers Encourages impulse buying CUSTOMER SERVICE 3 PROVIDING CREDIT FACILITIES More expensive goods Makes it more affordable Widens the market segment CUSTOMER SERVICE 4 PROVIDING PRODUCT INFORMATION Important for both new and existing customer Gives confidence in the staff Helpful in computer equipment CUSTOMER SERVICE 5 AFTER SALES SERVICE Dedication to customer satisfaction Lead to repeat business Potential new customer purchases Emphasize the customer importance & relationship between the business and customer REVISION QUESTION 1. Why is promotion an important part of the marketing mix? Answer : Promotion gives consumers information about the rest of the marketing mix. Without it consumers wouldn’t know anything about the product. REVISION QUESTION 2. What four types of promotion form this part of the marketing mix? Answer : advertisements, promotion, personal selling, public relations REVISION QUESTION 3. What is the difference between informative advertising and persuasive advertising? Answer : Informative advertising is where the emphasis or sales promotion is to give full information about the product. Persuasive advertising is trying to persuade the consumer that they really need the product and should buy it. REVISION QUESTION 4. What is a ‘target audience’? Answer : people who are potential buyers of the product of service REVISION QUESTION 5. Name eight different types of advertising media. Answer : REVISION QUESTION 6. Why is advertising likely to be very important in determining the success of a new product? Answer : If the advertisement is successful, then the product will also be successful. However if the advert is not successful, then the product will not be successful. REVISION QUESTION 7. What are six different types of promotion? Answer : price reductions, Gifts, Point-of-sale and demonstration, Competition, After sales services, Free samples REVISION QUESTION 8. When should a business use personal selling to promote their product? Answer: When the exact nature of the product itself can change, When customers need advice on how their requirements may be met REVISION QUESTION 9. How does public relation help to promote a product? Answer: It helps to promote a good brand image for the business REVISION QUESTION 10. What are five steps involved in the advertising process? 3. Answer : 1. Set objectives 2. Decide the advertising budget Create an advertising campaign 4. Select the media to use 5. Evaluate the effectiveness