Marketing mix- Promotion Flashcards
What are the 7 P’s:
Product, Price, Place, Promotion, Physical evidence, Process and People
What is promotion?
The process of raising awareness of mproducts and persuading customers to buy them instead of going to competitors
Why are sales promotions used?
- Helps launch new products
- Can extend the product lifecycle
- Can be used to entice customers from competition
- Reward existing customers
What are the types of promotion?
- Above the line (advertising)
- Below the line (into the pipeline and out of the pipeline)
(DONT NEED TO KNOW ADVERTISING)
What is into the pipeline?
Sales promotion offered by the manufacturer to the retailer
What are examples of into the pipeline promotion?
- Trade Credit
- Point of Sale material (POS)
- Sale or return
- Dealer loaders
- Staff training
- Promotion gifts
- Bulk buying discounts
Trade credit:
Manufacturers offer retailers credit to pay at a later date
Retailers can purchase stock and pay onec its sold but there will be a large debt if the stock is unsold
(into the pipeline)
Point of Sale (POS) materials:
Free posters and displays are given to the retailer to show customers the product
This enhances the look of teh retail store but retailers need to dispose of display material onec promotions end
(into the pipeline)
Sale or return:
Manufacturers give the retailer the option to return stock that doens’t sell
Allows retailers to try new products with no risk but products may be returned in poor condition creating waste
(into the pipeline)
Dealer Loaders:
These are special offers to encourage retailers to buy more
Retailers save on unit costs but they may overstock and be unable to sell of have products go out of date or fashion
Staff training:
Retail staff are trained so they are knowledgeable and can promote confidently
The staff are more confident so sales increase but it is expensive for the manufacturer and time consuming for the retailer
(into the pipeline)
Promotional gifts:
These are special limited edition items
They encourageloyalty to the supplyer but these gifts may not be wanted by the retailer
(into the pipeline)
Bulk buying discounts:
Encourage retailers to stock up on the product
Retailers save on costs but they may overstock and products go out of date or fashion
(into the pipeline)
What is out of the pipeline?
Sales promotion offered by the retailer to the customer
What are examples of out of the pipeline?
- Special offers
- Free gifts
- Vouchers and coupons
- Loyalty schemes
- Interest free credit
- Competitions
Special offers:
This includes BOGOF and short term promotion
Encourages new customers but customers may feel into buying the product when they don’t need it resulting in waste
(out of the pipeline)
Free gifts:
Used to tempt customers to buy the product
Gifts that have stamps encourage customers to return but its is difficult to find gifts that appeal to different target markets
(out of the pipeline)
Vouchers and coupons:
Usually given in newspaper or magazinses
Customers feel they get better value for money and may repeat purchase but profits are reduced and sales may be limited
(out of the pipeline)
Loyalty schemes:
Allows customers to collect points to get a discount or free gift e.g. starbucks ot boots
Information on customer habits can be gathered and promotion can target these preferences but customers may be wary if difficult to set up or opt out and it is timeconsuming and expensive
(out of the pipeline)
Interest free credit:
This is when the retailer offers customers credit to pay at a later date
Allows customers to make purchases when they want and when they can afford to but may create bad debt
(out of the pipeline)
Competitions:
Where customers purchase a product and enter a free competition
The retailer has customers details for furture marketing but expensive for retailer
What are public relations (PR)?
The act of controlling the image of a business that is perceived by the general public
What are methods to improve the companies PR?
- Managing social media accounts
- Press conferences
- Press releases
- Donating to charity
- Sponsorship
- Company visits
- Promotional merchendise
- (Employ PR manager)
- (Rebrand and improve image)
Press conferences:
When the media is invited to the business where they are given information about the business
It lets the business send a clear message and allows the media to get “on side” with the business
The business may have to take difficult questions on the spot and it may worsten the currtent situation if unprepared
Press release:
When the media is provided with a written account of the businesses activities
Used to counteract bad publicity and can send out message updates without having to counteract any questions
It takes time to ensure the correct wording especially under pressure
Donations to charity:
The business donates to charity anonymously
It promotes CSR and they are seen in an ethical way and helps promote a positive image
Shareholders however may prefer money to be invested into growth
Sponsorship:
The business pays to sponsor an event
They benefit from success of their sponsor and become popular with customers of their sponsor
Costs are very high and if the event suffers bad PR the business is associated with it
Company visits:
The business chooses to open up their factories for the public for a limited period of time
Customers get a sense of how the business is run
Staff must show people around which effects their productivity
Promotional merchendise:
This is giving out free stationary etc with the company logo and contact information
Customer is reminded of the company when they use the product, free gifts given and can be passed to other people meaning repeat exposure
Expensive to provide/ no immediate return and cheap gifts effect the image
What is product endoursment?
When a business uses celebrities to promote the product
What is product placement?
Involves the business paying another business to appear in films, TV shows or video games
What are factors that affect production?
- Target market
- Finance available
- Marketing mix
- Ethical practice (should be inline with ASA regulation)
