Marketing Mix- Promotion Flashcards
What is promotion the process of?
Promotion is the process of raising awareness of products and persuading customers to buy them
What are into-the-pipeline promotions?
Into-the-pipeline sales promotions are offered by the manufacturer to encourage retailers to purchase products from them
What are out-of-the-pipeline promotions?
Out-of-the-pipeline sales promotions are offered by the retailer to encourage customers to purchase products from them.
Why do businesses use promotion methods?
- Businesses use promotion methods to make customers aware of their products and services.
- Promotion methods are highly competitive and usually expensive.
What are examples of into-the-pipeline sales promotion?
— pointofsalematerials — sale or return — dealerloaders — promotionalgifts — stafftraining — trade credit
What is Trade credit,
Advantages and disadvantages?
-manufacturers offer retailers credit to pay for goods at a later date
Advantages
- no cash is required to stock products, which is good for new or struggling businesses
- retailers can purchase goods and then pay for them once they are sold
Disadvantages
-this could lead to bad dept if retailers are unable to sell the goods and repay the supplier
What is point of sale(pos) materials,
And what are the advantages and disadvantages?
-free posters and display materials are given to retailers to display products to customers
Advantages
- this can enhance the look of the retail store
- it can draw customers eyes to the product display
Disadvantages
-retailers may need to dispose of bulky display materials at the end of the promotion
What is sale or return,
And what are the advantages and disadvantages?
-manufacturers give retailers the option to return goods that do not sell
Advantages
- it allows retailers to try new products without the risk of being stuck with unsold inventory
- it improves cash-flow
Disadvantages
-products may be returned in a poor condition, creating waste
What is dealer loaders,
And what are the advantages and disadvantages?
-discounts used to encourage retailers to stock up on a product
Advantages
- retailers can save on the unit cost of products, allowing for greater profits
- savings can be passed to customers to increase sales revenue
Disadvantages
- retailers may overstock and find they are unable to sell
- products might go out of date or out of fashion
What is staff training,
And what are the advantages and disadvantages?
-manufacturers can offer retail staff free training to give them the skills and knowledge to sell the product
Advantages
- staff become experts in the product, which can impress customers
- the quality and motivation of staff are improved
Disadvantages
-training has to be done during normal hours , which reduces productivity or after hours which will increase overtime pay
What are promotional gifts,
And what are the advantages and disadvantages?
-Manufacturers can provide retailers with promotional gifts for customers to encourage the sale of their product and attract customers into the retailer. For example, a food company could provide branded bowls with the purchase of selected cereals.
Advantages
-tbc
Disadvantages
-tbc
What are examples of out-of-the-pipeline promotion methods?
- special offers
- free gifts
- vouchers and coupons
- loyalty schemes
- interest-free credit
- free trials/sample packs
- competitions
- trade shows and events
What are special offers,
And what are the advantages and disadvantages?
-this can include buy one get one free (BOGOF) and other short term promotions on selected items
Advantages
-this can encourage customers to try new products, which they may then purchase again at normal price
Disadvantages
-customers may feel pressured into buying more than they need, which may result in waste
What are free gifts,
And what are the advantages and disadvantages?
-used to tempt customers to buy a product again or for the first time
Advantages
-gifts that require multiple tokens/stamps can encourage repeat purchases
Disadvantages
-it can be difficult to find a gift that appeals to all target markets
What are vouchers and coupons,
And what are the advantages and disadvantages?
-usually given in newspapers/magazines to give customers money off future purchases
Advantages
- customers feel they are getting better value for money, which attracts new customers
- it can encourage repeat purchases
Disadvantages
- discounts offered by money-off vouchers can reduce profits
- some customers will only spend up to the value of the money-off voucher, limiting sales
What are loyalty schemes,
And what are the advantages and disadvantages?
-allow customers to collect points by making purchases, which can then be exchanged for discounts or free products in the future
Advantages
- information on customer habits and preferences can be gathered
- promotions can be targeted to reflect actual customers preferences
Disadvantages
- customers can be wary if they feel the scheme will be difficult to set up or opt out of
- these are time consuming and expensive to implement
What is interest-free credit,
And what are the advantages and disadvantages?
-retailers offer customers credit to pay goods at a later date
Advantages
-allows customers to purchase products and then pay for they when they can afford to
Disadvantages
-this can lead to bad dept if many customers are unable to pay by the agreed date
What are free trials/sample packs,
And what are the advantages and disadvantages?
-services like Netflix and audible offer a free trail for a month. New products are given away as a sample
Advantages
- customers can try the product and if they like it, will purchase at full price
- word of mouth can spread fro, customers enjoying free trails or samples
Disadvantages
- some customers will only use the free trial, which will cost the Business with no return
- it is possible for customers to use the free trail multiple times
What are competitions,
And what are the advantages and disadvantages?
-businesses can use competitions to encourage customers to buy in order to take part
Advantages
- can encourage repeat custom as customers try to win or collect more tokens
- can create hype and excitement around a product, which can lead to new custom
Disadvantages
- prizes can cost substantial amounts of money
- the associated marketing costs of the competitors can be high and often packaging has to be redesigned
What are trade shows and events,
And what are the advantages and disadvantages?
-attending industry trade shows or events such as the royal highland show to give out samples and engage with the public
Advantages
- feedback from customers can be gained
- giving out merchandise can spread word/images of the brand
Disadvantages
- some shows have very high rates for a stall
- large quantities of free goods have to be given away for maximum impact
What are public relations? And what do some larger businesses have?
- Public relations (PR) is the act of controlling the image of a business that is perceived by the public
- some larger businesses have their own dedicated PR department
What is the main aim of the public relations department?
- to build awareness of the brand
- create a positive imagine for the organisation
What methods are used by the PR to improve the image of the organisation?
- press conferences
- press releases
- donations to charities
- sponsorship
- company visits
- promotional merchandise
- product endorsement
- product placement
What are press conferences,
And what are the advantages and disadvantages?
-the media are invited to a business presentation, where they are given information or news. A new or updated product might be launched
Advantages
- businesses can send a message or update out to a wide audience while keeping control, to a certain extent, of what is reported
- it can help to get the media ‘on side’ and allows the press the opportunity to ask questions to the business directly
Disadvantages
- could have to face difficult questions and be put on the spot
- the business could end up making the situation worse in front of the press if they are under-prepared
What are press releases,
And what are the advantages and disadvantages?
-The media are provided with a written account of a businesses newsworthy activities or events. Updated mission statements may also be released to the media
Advantages
- this can be used to counteract bad publicity
- businesses can send out messages or updates without being subject to further questioning
Disadvantages
-can take a long time to ensure wording is perfect, especially if the business is already under pressure due to a mistake
What are donations to charities,
And what are the advantages and disadvantages?
-some businesses donate to charities anonymously, while others will take the opportunity for a good public relations event
Advantages
- promotes the CSR aims of the business and can make them seem ethical
- this can help the business achieve a positive Image
Disadvantages
-some shareholders may prefer money is invested in growing the business
What is a sponsorship,
And what are the advantages and disadvantages?
-some businesses pay to sponsor an event, team or venue. This is popular in the sporting industry.
Advantages
- businesses can benefit from the successes of those that they sponsor
- this can help businesses to become popular with customers who visit/support the sponsored event, team or venue
Disadvantages
- it can cost a lot to sponsor big events
- if an event or team suffers bad PR itself then the business will be associated with it
What are company visits,
And what are the advantages and disadvantages?
-businesses may choose to open up their factories to the public for a limited period
Advantages
-customers are able to get a sense of what the business is like and how it is run
Disadvantages
-a dedicated staff member or team will have to show visitors around, affecting their productivity elsewhere
What is promotional merchandise,
And what are the advantages and disadvantages?
-this is giving out free stationery, key rings, even items like golf balls with the complaint logo and contact info on them
Advantages
- customers are reminded of the company each time they use the item
- everyone likes a free gift! Customers feel rewarded and are more likely to return to the business
- merchandise such as pens can be passed on to other people which means repeat exposure to the brand name
Disadvantages
- merchandise can be expensive to provide and has no immediate return
- cheap-looking free gifts can adversely affect the image of the business, even if they are given out for free
What is product endorsement,
And what are the advantages and disadvantages?
-product endorsement involves businesses using celebrities (also known as celebrity endorsement) to promote the product
Advantages
- the use of a celebrity will make consumers who like the celebrity more likely to purchase the product to be like them
- the product will be advertised for free every time the celebrity is spotted wearing or using it in public
- if a celebrity gets good media coverage (eg winning a sports event), it will provide positive exposure for the product they are associated with
- higher prices can be changed as the use of a celebrity gives the product exclusivity
- Brand loyalty can be created for as long as the celebrity is involved in the endorsement
Disadvantages
- some consumers can be put off a product if they don’t like the celebrity that has been chosen to endorse it
- if a celebrity gains bad publicity it will tarnish the image of the products they are associated with
- it can be very expensive to pay celebrities to endorse products
- poor performance by celebrities will result in lower sales of the products they indorse
What is product placement,
And what are the advantages and disadvantages?
-product placement involves businesses paying for products to appear in films, TV shows, or video games.
Advantages
- awareness of products is generated, often ti worldwide auidences
- it is a form of subliminal advertising, the audience doesn’t know they are watching a promotion, they just watch the film
- products that can be identified with character who customers like, can result in sales, as they want to be like the character or the actor who plays them
- merchandise ‘spin-offs’ can be sold, increasing sales on the back of a successful placement
Disadvantages
- the time of exposure can be very short, limiting the chances of consumers remembering the product they have seen
- often as a result of bidding wars with rival brands to secure the rights to appear in films, tv shows and games, product placement can cost a lot of money
- consumers may be put off certain products if they are associated with characters they don’t like
- products can appear as part of a negative storyline which can put customers off
What are the factors affecting methods of promotion?
- the target market
- the finance availability
- the marketing mix
- ethical practices
The target market
Businesses should promote their products in places where they are likely to be seen by the target market. Market research feedback will help with this.
The finance availability
Every business would love to advertise at half time during the World Cup final but only the biggest marketing budgets will stretch to this
The marketing mix
All elements of the marketing mix should work in synergy. This means the methods are more effective when combined seb though they work well as stand-alone elements
Ethical practices
Promotions should be ethical in order to avoid upsetting others. Eg promotions should not:
- mislead customers
- be indecent
- make false claims designed to harm the competition
