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Business

Study Notes

Promotional Decisions

Level:
GCSE, AS
Board:
AQA, Edexcel, OCR, IB

Promotion is all about communication. Promotion is the way in a business makes its products known to the customers, both current and potential.

It is a common mistake to believe that promotion by business is all about advertising. It isn't. There are a variety of approaches that a business can take to get their message across to customers, although advertising is certainly an important one.

The main aim of promotion is to ensure that customers are aware of the existence and positioning of products. Promotion is also used to persuade customers that the product is better than competing products and to remind customers about why they may want to buy.

It is important to understand that a business will use more than one method of promotion. The variety of promotional methods used is referred to as the promotional mix.

Which promotional methods are used depends on several factors:

Stage in the life cycle

E.g. advertising is important at the launch stage

Nature of the product

How much information is required by customers before they buy

Competition

What are rivals doing?

Marketing budget

How much can the firm afford?

Marketing strategy

Other elements of the mix (price, product, place etc)

Target market

Appropriate ways to reach the target market

The main methods of promotion are:

  • Advertising
  • Public relations & sponsorship
  • Personal selling
  • Direct marketing
  • Sales promotion

A business will use a range of promotional activities for its product, depending on the marketing strategy and the budget available.

The way in which promotion is targeted is split into two types:

Above the line promotion – paid for communication in the independent media e.g. advertising on TV or in the newspapers. Though it can be targeted, it could be seen by anyone outside the target audience.

Below the line promotion – promotional activities where the business has direct control e.g. direct mailing and money off coupons. It is aimed directly at the target audience.

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