Wednesday, 16 October 2013

7.3 Using Promotion for Growth


Promotional activities for growth
10/10 Key business term test.


1.  Promotional mix - a specific combination of promotional methods used to promote one product or a family of products to increase customer's awareness of the product, service or company. 
2.  AIDA - a selling system that stands for: Attention (attract the attention of a customer), Interest (raise customer interest by demonstrating advantages and benefits), Desire (convince customers they need the product), Action (lead customers towards purchasing the product)
3.  USP - unique selling proposition, or unique selling point; the thing that makes a product or service special or different from others
4.  Sponsorship -  a business pays for an activity or event to gain publicity
5.    Direct marketing - the sale of products to people by post or telephone instead of in shops e.g. email, telemarketing and direct mail
6.  Public relations - the activity of creating a good opinion among people about a person, product, company or institution
7.  Advertising - the business of making advertisements on TV and other media to encourage them to buy the product being advertised.
8.  Personal selling - face-to-face selling in which a seller attempts to persuade a buyer to make a purchase
9.  Sales promotion - a marketing technique designed to create sales for a product over a defined period of time
10. Promotion - all the different ways that a business communicates to consumers with the aim of selling products


Ever thought that a promotion could attract more than just customers. Well Dubai Sports City did exactly that when they launched their product - the first purpose built sports city in the world.  The promoters were keen to attract businesses, suppliers and customers all at once and used some of the biggest names in sport to promote their $2bn investment. Its not just a sports city but more of a community with schools, hospitals, leisure opportunities, residences and shops and at the heart of it a sports themed retail mall.  It was due for completion in 2010 and their promotional video can be seen here on youtube.

STARTER - list the key messages that the promotion is trying to put across

Purpose of promotion using famous names and leading brands will always attract business and in turn this will attract customers.  Locally Bicester Village is evidence of that.  Promotion serves TWO main purposes - to INFORM the customer of the existence of a product and to PERSUADE them to buy it. Promotion is then a major tool to help a business to grow.  Not only to boost sales but also to increase market share.

Homework - Typical promotional campaign - evolution or revolution?

Can you really design a car that costs 2p a mile to run and can reach speeds of up to 93mph?  Click here to find out more from this leaked press release yesterday.

This big budget campaign included film stars launching the car which they clearly sponsored the lauch event of.  The USP promoted is what?  How exciting is having a little bit of the future now? A promotional video has also be sent out and other press and magazine articles include Zip Up warm!.  This all happens in the centenery year where BMW have celebrated making cars at PLANT COWLEY since 1913 - over 100 years this year.  Not bad from a company that bought the Mini BRAND for just £1.  Have you noticed what everyone has in common?

How being bigger helps as a business grows it is likely to have a bigger budget for advertising and promotional activities.  When it grows its product portfolio it will often focus on particular products and target promotions that are likely to be more profitable.  Promotions help a business grow by encouraging more sales and a bigger market share. All promotional activities come with a cost.  if it is costing lots to gain the increased sales it needs to know if it is going to be effective.

Above and below the line and promotional activity that is paid for directly, such as advertising is called 'above the line' promotional expenditure.  Other methods of promotion such as PR, sponsorship of events and celebrity endorsements are known as 'below the line' This brings the attention of the brand to the public without the cost of advertising.  Corporate hospitality is another example.  A company may buy tickets to an event and use them to reward clients.  an example of this is Vodafone VIP.

Advertising above the line spending tends to be expensive but can also be effective.  The more effective it is the more it will costs. Advertising on TV will reach millions of customers but will cost millions.  Targeting particular groups through mailshots or using e-flyers, texts and automated phone calls is much cheaper. Effective advertising is summed up by the acronym AIDA - ATTENTION, create INTEREST, develop DESIRE, and lead to ACTION

Influence of markets a specialist product will need to target its advertising in a specialist market. The choice of promotional method will be influenced by the nature of the product and the market in which it is being sold.

Discussion Advertising, whether by TV, radio, poster or magazine or even point of sale, s all a waste of resources that could be better used on making more product.  Advertising contributes nothing to business but does cost a lot of money.  Do you think this is true? Do you think all advertising should be banned?

Web-based activity visit www.brandchannel.com/brandcameo_films.asp where you can see which brands have been featured in recent movies.  Choose three of these and explain for each what it is you think the product manufacturers were hoping to gain from that particular film.

Exam Questions on Promotional Activities for Growth
  1. Give two reasons for promotion
  2. What is 'above the line' promotion?
  3. What is 'below the line' promotion?
  4. Give an example of 'below the line' promotion?
  5. What is meant by 'corporate hospitality'?
  6. Give an example of a short term sales promotion.
  7. Give an example of how a business could target particular groups through promotion.
  8. What does AIDA stand for?
  9. What is a USP?
  10. Give two reasons why some media are more expensive than others.
Worksheets
promotional mix

Nine mark question 
Wow Films
The Wow film company has just finished filming its new action movie packed with big name stars.  The business wants to promote the film to make sure it is a huge success.  The managers of Wow realise the importance of the promotional mix as part of the overall marketing mix.
   1.    What is meant by the ‘marketing mix’                                                              (2 marks)
   2.    Outline TWO possible elements of the ‘promotional mix’                              (5 marks)   
   3.    Discuss the best ways of promoting Wow’s new film.                                   (9 marks)
   4.    How much do you think the success of the new film will depend on the promotional activities of the Wow film company? Explain your answer.                                               (9 marks)

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