Promotion 

There are two types of promotion 

➔ Above-the-line-promotion – involves advertising using the media. Eg. Advertising in newspapers and magazines, advertising on the television and the radio and banner adverts on websites. 

➔ Below-the-line-promotion – is any other form of promotion that does not involve using. Eg. Coupons, merchandising and direct mailing. 

Why promote?

• Improve or develop the image of the business
• Tell consumers about a new product
• Remind customers about an existing product
• Reach a widely geographically dispersed target audience
• Reassure customers about products
• Show consumers that rival products are not as good

Advantages and Disadvantages of main media 

BELOW-THE-LINE PROMOTION

Below-the-line promotion is usually designed and produced by a business ‘in- house’. It refers to any form of promotion that does not involve advertising. A variety of different promotions might be used. 

Sales promotions 

These are incentives to encourage people to buy products. They are used to boost sales in the hope that if new customers are attracted they will continue to buy the product. Sales promotions can include the following. 

• Free gifts: Businesses might give free gifts to customers when they buy the product. For example, computer companies often give away free software. 
• Coupons: Money-off coupons, or discount codes, can be used by businesses to attract customers. They may be attached to products, appear in newspaper adverts or pushed through letterboxes. A number of specialist coupon websites have emerged in recent years. People can logon to the sites and print-off coupons entitling them to discounts on a wide range of products. 
• Loyalty cards: Some businesses reward customers according to how much they spend. Points are collected and then exchanged for cash, vouchers or free goods. Loyalty cards are popular with supermarkets, credit card companies and stores. 
• Competitions: People may be allowed free entry into a competition when they buy a particular product. An attractive prize is offered to the winners. 
• BOGOF offers: This stands for Buy One Get One Free. These are popular 
• with many businesses such as supermarkets, transport services and restaurants. 
• Money off deals: Businesses may offer customers discounts such as “30% off’ or ‘an extra 20% free’. These are similar to BOGOF deals and are used by a range of suppliers. 

Merchandising and packaging 

Some businesses may arrange the point of sale so that it is interesting and eye catching and likely to encourage sales. This is called merchandising. Some examples are outlined below. 

• Product layout: The layout of products in a store is often planned very carefully. This is to encourage shoppers to follow particular routes and look at certain products. Products that stores want you to buy are placed at the most visible locations, such as at the end of shelving units and at eye level. 
• Display material: Posters, leaflets and other materials may be used to display certain products with the aim of persuading customers to buy. Lighting and other special effects might be used to improve the environment. Window displays are considered important to retailers; they are used to draw in customers. 
• Stock: Businesses must keep shelves well stocked because empty shelves create a bad impression. Also, if items are out of stock, customers may shop elsewhere. 

Direct mailing 

Direct mailing is where businesses send households leaflets or letters. Sometimes personal letters are used. They may contain information about new products or details of price changes, for example. Increasingly, email is being used to contact consumers rather than the postal system. The development of IT and use of customer databases has resulted in more use of personalised marketing. 

Direct selling or personal selling

Direct selling or personal selling might involve a salesperson calling at households or businesses hoping to sell products. 

Exhibition and trade fairs 

Some businesses attend trade fairs or exhibitions to promote their products. 

Public Relations 

❖ PRESS RELEASE

Some information about the business may be presented to the media. This might be used to write an article or feature in a television programme. For example, a business might announce that it is to create 2000 new jobs. Such positive news would be of interest to the media and they might want more information. 

❖ PRESS CONFERENCE 

This is where representatives face the media and present information verbally. This allows for questioning and other feedback. The press might be invited to a new product launch, for example. 

❖ SPONSORSHIP 

Many companies attract publicity by linking their brands with sporting events through sponsorship. For example, Samsung, Coca-Cola, Omega,Bridgestone, McDonald’s, Visa and Panasonic were some of the businesses that sponsored the Rio Olympic Games in 2016 in return for publicity at the event. The sponsoring of television programmes is also becoming popular. 

One of the key advantages of sponsorship is that the name of the brand can be projected globally on the television or in print media without paying broadcasters or publishers. This is because most of the major events targeted by sponsors are televised or covered in the press. 

❖ DONATIONS 

Donations to charities and the local community might be used by businesses to improve their image. A large donation from a business is likely to be reported in the media if the identity of the donor is revealed. 

Using Technology in Promotion 

Many businesses are keen to exploit new technology when marketing their products. The development of online businesses, mobile devices and social media platforms have all contributed to many businesses re-allocating their advertising expenditure in favour of the new technological methods. Some of The common methods used by businesses are outlined below. 

ONLINE TARGETED ADVERTISING 

Some of the traditional methods of advertising often meant that adverts were directed at a lot of people who would never buy the product. For example, a television advert promoting a four-wheel drive car would only appeal to a minority of viewers. Therefore, much of the money spent on the advert would appear to be wasted. New technology means that adverts can now be more targeted. 

This means that adverts are only directed at people who are likely to be interested in the product. This is possible because businesses can use browsing habits and other data collected from online users to make adverts more personalised. This means for example, if someone has been browsing websites to book a flight from Mumbai to Colombo, several hours or days later they might see adverts for such flights while looking at a completely unrelated website, such as the weather. 

Marketing companies like DoubleClick compile records of users’ browsing habits, which are then sold on to businesses. This information is then used to tailor advertising to specific customers and therefore avoids the waste of misdirected adverts. 

VIRAL ADVERTISING 

Advertising using the Internet has provided the opportunity for viral advertising. This involves any strategy that encourages people to pass on messages to others about a product or a business electronically. It creates the potential for exponential growth in the exposure of a message. Like a virus, these strategies exploit the process of rapid multiplication that results from people sending messages to family, friends and colleagues, who then send them on again. Not only can people send text relating to a marketing message, but they also can send images, such as photographs and video clips. One example of a successful viral advertising campaign was produced by Disney, which showed a film clip of Disney characters interacting with shoppers in the USA. 

SOCIAL MEDIA

The use of social media platforms, such as Facebook, Twitter, Instagram and Tumblr, in advertising, is growing at a rapid rate. Social networks gather lots of information about users, which allows businesses to target their advertsmore effectively. When people use the Internet, every click, every view and every sign-up is recorded somewhere. 

E-NEWSLETTER 

Some businesses send customers e-newsletters. These are documents sent electronically to interested parties. They are a good way for a business to keep in touch with consumers who have previously purchased, or shown an interest in, products that the business sells. 

Branding 

Many businesses aim to build a powerful brand. Branding involves giving a product a name, term, sign, symbol, design or any features that allows consumers to instantly recognise the product and differentiate it from those of competitors. 

Brading is used to: 

➔ Help recognition 

➔ Create customer loyalty 

➔ Differentiate the product 

➔ Develop an image 

➔ Raise prices when brand and image becomes stronger

The Use of Production Strategies in Different Market Segment 

❖ Advertising 

Some form of advertising is likely to be used in most market segments. 

❖ Sponsorships

Sponsorships provide financial support to an event, person or organisation, either through free products or services, or through a financial payment. In return, the business, product or service is prominently displayed. Sponsorship is commonly used at sporting events, conferences, exhibitions and charity events. 

❖ Product trials 

Product trials are designed to encourage consumers to try a product either for free or at a reduced cost. A product trial may involve offering: 

● free samples, eg food products 

● free trials, eg movie streaming services 

● trial offers, eg money back on a purchase 

❖ Special offers 

Special offers are a type of sales promotion. They offer incentives to persuade consumers to make a purchase. Examples include: 

● Discounts 

● Competitions 

● Buy-one-get-one-free offers 

● Free gifts 

● Money-off vouchers 

● Loyalty cards 

❖ Branding 

A brand image can be used as promotion, so businesses often want to establish a positive brand image. When a new product is launched under an established brand name, consumers may be more likely to purchase it because of their knowledge of the existing brand.