BM 4.5 Promotion

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IB Business and Management (Standard Level)
All material taken from the IB Business and Management Textbook:
"Business and Management", Paul Hoang, IBID Press, Victoria, 2007

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BM 4.5 Promotion

  1. 1. IB Business & Management <ul><li>Unit 4.5: Promotion </li></ul><ul><li>Lesson 1: Objectives of Promotion (pp. 557-574) </li></ul>
  2. 2. 1. Think about it... <ul><li>“ Advertising is the art of convincing people to spend money they don’t have for something they don’t need.” - Will Rogers (1879-1935) comedian </li></ul><ul><ul><li>What did Rogers mean by this quote? </li></ul></ul><ul><ul><li>Are we constantly being deceived? </li></ul></ul><ul><ul><li>Should companies be socially responsible for the advertising they create? </li></ul></ul>
  3. 3. 2. Focus Questions <ul><li>1. What are the objectives of promotion? </li></ul><ul><li>2. List and explain the types of promotion. </li></ul><ul><li>3. What is above and below the line of promotion? </li></ul><ul><li>4. What is included in the promotional mix </li></ul>
  4. 4. 3. Promotion <ul><li>refers to methods of communicating messages to the market when selling a firm’s product. </li></ul><ul><li>promotion includes, sales promotion, branding, raising publicity (awareness) and advertising campaigns. </li></ul><ul><li>Objectives of promotion : </li></ul><ul><ul><li>inform: to alert the market about a firm’s product. </li></ul></ul><ul><ul><li>persuade: to encourage customers to make a purchase. </li></ul></ul><ul><ul><li>remind: used to retain customer awareness and interest of an established product. </li></ul></ul>
  5. 5. 4. Types of Promotion <ul><li>Fours types of promotion : </li></ul><ul><ul><li>1. Above-the-line: use of mass media sources (TV). </li></ul></ul><ul><ul><li>2. Below-the-line: use of non-mass media (free samples). </li></ul></ul><ul><ul><li>3. Pull promotion: used to stimulate demand. </li></ul></ul><ul><ul><li>4. Push promotion: rely on intermediaries such as wholesalers and retailers. </li></ul></ul>
  6. 6. 5. Above-the-line Promotion <ul><li>ATL promotion refers to any form of paid-for promotional technique through independent media. Such as: </li></ul>TV Radio Cinema Newspaper Magazines Outdoor advertising
  7. 7. 6a. Below-the-line Promotion <ul><li>BTL promotion refers to all forms of non-media promotion activities. Business has direct control over the production of all its advertisements. Such as: </li></ul>Branding Slogans Logos Packaging Word-of-mouth Direct marketing Direct mail Publicity Sponsorship
  8. 8. 6b. Below-the-line Promotion <ul><li>Two more types of BTL promotion include : </li></ul><ul><ul><li>Sales promotion : ways of boosting sales and attracting new customers. </li></ul></ul><ul><ul><ul><li>money-off coupons </li></ul></ul></ul><ul><ul><ul><li>free samples </li></ul></ul></ul><ul><ul><ul><li>free gifts </li></ul></ul></ul><ul><ul><ul><li>customer loyalty schemes </li></ul></ul></ul><ul><ul><ul><li>win a prize schemes </li></ul></ul></ul><ul><ul><li>Point-of-sales promotions : </li></ul></ul><ul><ul><ul><li>refers to the promotion of a product at the place or location where the customer buys the product. </li></ul></ul></ul><ul><ul><ul><li>Think about when you go to the check out at a supermarket. What do you see beside you when you are standing in line waiting to check out? </li></ul></ul></ul>
  9. 9. 7a. Promotional Mix <ul><li>is the set of tools that a business can use to communicate effectively the benefits of its products or services to its customers. </li></ul><ul><li>The mix is a range of above and below the line methods used to market a product. </li></ul><ul><li>When deciding on a promotional mix use AIDA : </li></ul><ul><ul><li>Attention: should raise awareness of the product </li></ul></ul><ul><ul><li>Interest: should keep customers interested </li></ul></ul><ul><ul><li>Desire: should generate a desire or feeling of ‘need’ for the product </li></ul></ul><ul><ul><li>Action: should encourage customers to take action </li></ul></ul><ul><li>Another approach is FAB : </li></ul><ul><ul><li>Features </li></ul></ul><ul><ul><li>Advantages </li></ul></ul><ul><ul><li>Benefits </li></ul></ul>
  10. 10. 7b. Promotional Mix <ul><li>When creating a promotional strategy YOU the marketer will want to consider a combination of factors, such as: </li></ul><ul><ul><li>cost of promotional medium </li></ul></ul><ul><ul><li>nature of the product </li></ul></ul><ul><ul><li>product’s position in its life cycle </li></ul></ul><ul><ul><li>legislation </li></ul></ul><ul><li>Using a single promotional technique is unlikely to be effective; use many: </li></ul><ul><ul><li>TV </li></ul></ul><ul><ul><li>Radio </li></ul></ul><ul><ul><li>Outdoor advertising </li></ul></ul><ul><ul><li>Newspapers </li></ul></ul><ul><ul><li>Websites, Cinema, etc. </li></ul></ul>
  11. 11. 8a. Four Key Elements <ul><li>The Chartered Institute of Marketing suggests four key elements to make up a promotional mix: </li></ul><ul><ul><li>1. Advertising: </li></ul></ul><ul><ul><ul><li>“ the science of arresting the human intelligence long enough to get money from it.” </li></ul></ul></ul><ul><ul><ul><li>used to shape and develop awareness, perceptions, knowledge, and attitudes. </li></ul></ul></ul><ul><ul><ul><li>advertising can be informative or persuasive, or both. </li></ul></ul></ul><ul><ul><li>2. Personal selling: </li></ul></ul><ul><ul><ul><li>relies on sales representatives directly helping and persuading potential and existing customers to make a purchase. </li></ul></ul></ul><ul><ul><ul><li>is tailored to the individual needs of the customers. </li></ul></ul></ul>
  12. 12. 8b. Four Key Elements <ul><li>The Chartered Institute of Marketing suggests four key elements to make up a promotional mix: </li></ul><ul><ul><li>3. Public relations (PR) : </li></ul></ul><ul><ul><ul><li>aimed at establishing and protecting the desired image of an organization. </li></ul></ul></ul><ul><ul><ul><li>concerned with getting good press coverage. </li></ul></ul></ul><ul><ul><li>4. Sales promotion : </li></ul></ul><ul><ul><ul><li>short-term incentives designed to stimulate sales of a product. </li></ul></ul></ul><ul><ul><ul><li>can help gain short term competitive head start </li></ul></ul></ul><ul><ul><ul><li>get rid of excess or old stock </li></ul></ul></ul><ul><ul><ul><li>encourages customer loyalty </li></ul></ul></ul>
  13. 13. End

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