4.5 Promotion and place

Question 1

Define promotion

Answer 1

Use of advertising to inform and persuade consumers

Question 2

Objectives of promotion

Answer 2

Change or enhance brand image
Raise sales
Encourage retailers to stock the product

Question 3

Define above the line promotion

Answer 3

Promotion directly paid for by the company to communicate with consumers through media
Tends to be costly
e.g. TV, radio, internet

Question 4

Define below the line promotion

Answer 4

Promotion that is not directly paid for by the company
Short term incentives to purchase
E.g. Price promotion, loyalty cards, buy one get one free, coupons, prizes, free samples

Question 5

Pros of below the line promotion

Answer 5

No Direct Cost involved - Cheaper in the short run
Current customers more likely to stay
Get customer spending patterns

Question 6

Pros of above the line promotion

Answer 6

Reach larger audience
More likely to appeal to new customers
No long run costs

Question 7

Pros of technological promotion

Answer 7

Can reduces cost
Easier to target – websites gather personal data
Interactive
Data – e.g. % click on link
Speed

Question 8

Cons of technological promotion

Answer 8

Skills and Employees required
Time consuming to maintain online presence
Negative feedback made public
Security issues - Ethics

Question 9

Importance of place

Answer 9

Customers
Customers can see, try and buy
Can return if necessary
After-sales service

Manufacturers
Need places to sell their products
That create the right image

Retailers
Need to make a profit
Is there enough profit margin for a retailer?

Question 10

Define retailer

Answer 10

Business selling small quantities direct to consumers

E.g. Car showrooms, fruit + veg shops, supermarket

Question 11

What are the three distribution channels

Answer 11

Single intermediary channel
Manufacturer–retailer–consumer

Direct selling
Manufacturer–consumer

Two-intermediary channel
Manufacturer–wholesaler–retailer–consumer