Promotion (Leaving Cert Business): Revision Notes
Promotion
What is promotion?
Promotion refers to all the communication efforts a business makes to influence customers and persuade them to buy their products or services. It's one of the key elements of the marketing mix and plays a crucial role in connecting businesses with their target market.
The main purpose of promotion is to inform potential customers about products, convince them of the benefits, and ultimately encourage them to make a purchase. Businesses use promotion to introduce new products, boost sales of existing items, or maintain customer awareness during different stages of the product lifecycle.
The promotional mix
The promotional mix consists of four main components that businesses can combine to create an effective promotional strategy. These work together to reach customers through different channels and methods.
The four key components are:
- Advertising - paid-for communication through media channels
- Personal selling - direct interaction between salespeople and customers
- Sales promotion - short-term incentives to encourage immediate purchase
- Public relations - activities to build positive relationships with the public
Each component serves a different purpose, and successful businesses often use a combination of these methods to maximise their promotional impact.
Advertising
Advertising is paid-for information about a business's goods or services that is communicated through various media channels such as newspapers, radio, television, and the internet. The goal is to persuade consumers to buy the product or service being advertised.
Types of advertising
Different types of advertising serve different purposes depending on what the business wants to achieve:
Informative advertising provides factual information about products or services. This is particularly useful when launching new products or explaining features and benefits to customers.
Persuasive advertising aims to convince people that they need a particular product, even if it's not essential. This type is commonly used for luxury items and during the growth stage of the product lifecycle.
Competitive advertising tries to convince customers that one product is better than competitors' offerings. Mobile phone companies frequently use this approach when comparing their services to rivals.
Comparative advertising directly compares products with competitors, highlighting specific advantages or features that make one product superior.
Generic advertising promotes an entire industry rather than individual brands. For example, the National Dairy Council's "Drink more milk" campaign benefits all dairy producers.
Reminder advertising is typically used during the decline stage of the product lifecycle to maintain customer awareness and encourage repeat purchases.
Advertising methods and media
Businesses can choose from various media channels to deliver their advertising messages, each with distinct advantages and limitations:
Television Advertising Example:
Television advertising offers massive reach and can show products in action, but it's expensive and may not suit all target markets. A 20-second slot during peak time can cost around €4,000.
Benefits: Visual impact, wide reach, demonstrates products in action Drawbacks: High cost, may not reach specific target demographics effectively
Radio advertising is more affordable than television and allows businesses to target local markets effectively. However, it lacks visual appeal, which may be important for certain products.
Newspaper advertising provides nationwide or local reach and is relatively inexpensive. The main drawback is that newspapers are often discarded quickly, limiting the advertisement's lifespan.
Magazine advertising can target specific audiences more precisely and has a longer shelf life than newspapers. However, a magazine advertisement can cost up to €10,000.
Internet and social media advertising through platforms like Facebook, Instagram, and TikTok allows businesses to reach global audiences and target specific demographics. This method is often cost-effective and enables companies to track engagement easily.
Billboard advertising is common in cities and large towns, particularly effective for catching the attention of people on the move, such as commuters.
Factors affecting advertising choices
Several factors influence which advertising medium a business chooses:
Cost considerations are crucial, as national media can be very expensive. Businesses with limited budgets may focus on local or online advertising options.
Target market characteristics determine the most appropriate medium. For example, if targeting young people, social media advertising might be more effective than newspaper advertisements.
Type of product also matters - visual products like food or fashion benefit from television or magazine advertising, while services might work well with radio advertisements.
Legal restrictions apply to certain products. For instance, tobacco cannot be advertised on radio or television, and alcohol advertising has strict guidelines under consumer protection legislation.
Product lifecycle stage influences advertising strategy. During the launch phase, extensive advertising generates awareness, while mature products might focus on online advertising to maintain consumer awareness.
Sales promotion
Sales promotion involves using short-term incentives and techniques to attract customers and stimulate immediate sales. Unlike advertising, sales promotion offers direct incentives for customers to buy products quickly.
Common Sales Promotion Techniques:
- Price reductions such as "Buy one, get one free" offers or percentage discounts
- Competitions and prize draws that encourage customer participation
- Free samples that allow customers to try products before purchasing
- Coupons that provide discounts on future purchases
- In-store displays and point-of-sale materials that attract attention
Sales promotion differs from advertising because it offers consumers a direct incentive to buy, whereas advertising focuses on persuading through information and persuasion.
Merchandising is an extension of sales promotion that involves using promotional displays and point-of-sale materials to attract customer attention. Examples include window displays, cardboard displays, and attractive product positioning on shelves.
These techniques are particularly effective for stimulating sales among occasional consumers, rewarding loyal customers, and increasing purchase frequency during specific periods.
Public relations
Public relations involves creating and maintaining a positive public image for the business and its products. This component of the promotional mix focuses on building trust and credibility rather than direct selling.
Public relations activities include:
Press releases and conferences where businesses share important news with media organisations, generating free publicity for the company.
Sponsorship Example:
Sponsorship arrangements where businesses support sports teams, events, or individuals. For example, Irish companies often sponsor GAA teams or individual athletes like Rhasidat Adeleke, creating positive associations with their brands.
This creates a win-win situation where the sponsored party receives financial support, and the business gains positive brand exposure.
Celebrity endorsements involve paying celebrities to promote or be associated with products. This can be highly effective but also risky if the celebrity becomes involved in negative publicity.
Community involvement through charitable donations, local event sponsorship, or environmental initiatives helps businesses build positive relationships with their local communities.
Social media engagement and maintaining positive online presence through regular interaction with customers and stakeholders.
Public relations can sometimes involve managing negative publicity. When businesses face challenges, having a strong public relations strategy helps maintain customer trust and minimise damage to the brand reputation.
Choosing the right promotional strategy
Successful businesses carefully consider several factors when developing their promotional strategy:
The target market characteristics influence which promotional methods will be most effective. Different age groups, income levels, and interests respond to different promotional approaches.
Budget constraints determine which promotional activities are feasible. Smaller businesses might focus on social media and local advertising, while larger companies can afford national television campaigns.
The nature of the product affects promotional choices. Complex products might require personal selling to explain features, while everyday items might benefit from sales promotions and advertising.
Competition levels in the market influence promotional intensity. Highly competitive markets often require more aggressive promotional strategies to gain customer attention.
Business objectives such as increasing market share, launching new products, or maintaining customer loyalty guide promotional decisions and budget allocation.
Remember!
Key Points to Remember:
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Promotion communicates value - it's how businesses inform and persuade customers about their products and services
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The promotional mix combines four elements - advertising, personal selling, sales promotion, and public relations work together for maximum impact
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Different advertising types serve different purposes - from informative campaigns for new products to reminder advertising for established brands
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Media choice depends on target audience and budget - social media offers cost-effective targeting while television provides massive reach
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Sales promotion creates immediate action - short-term incentives encourage quick customer response and boost sales during specific periods