Name: Unit 3: Marketing Chapter 19 – Promotion & Place Date:

Aim (s)

• To develop an understanding of the marketing mix (promotion & place).

Objectives

• Analyse sales promotion, advertising and direct promotion, and the factors a business should consider when

making promotion-mix decisions for its products.

• Assess the importance of packaging and branding in marketing of a product.

• Analyse the importance of place in marketing mix and evaluate the main distribution channels.

LO1: Analyse sales promotion, advertising and direct promotion, and the factors a business should consider when

making promotion-mix decisions for its products.

Promotion: the use of advertising, sales promotion, personal selling, direct mail and trade fairs, sponsorships
and public relation to inform consumers about products and services and persuade them to buy.

Inform potential customers about

a product, service, or brand.

Establish and reinforce a brand's image

and values in the minds of consumers.
Objectives of
promotion Encourage retailers to stock
and actively promote.

Demonstrate superior qualities

compared with those of competitors.
The main elements of the mix are:

Promotion mix: the combination of promotional techniques that a firm uses to sell a product.

• Advertising (above-the-line promotion)

• Sales promotion (below-the-line promotion)
• Direct mail
• Telemarketing
• Personal selling
• Digital promotion
Advertising: communicating information about a product or business through different kinds of media. Also known
as above the line.
Above-the-line: a form of promotion that is paid for by a business.
 Name: Unit 3: Marketing Chapter 19 – Promotion & Place Date:

2 types of advertising:
 Informative advertising
 Persuasive advertising
Advertising agencies – what do they do?
Research the market
Advise on most cost effective media
Use their designers to create appropriate adverts
Film or print the adverts
Monitor public reaction and feedback
Advertising methods
• Print advertising
• Broadcast advertising
• Outdoor advertising
• Product placement advertising
• Guerilla advertising
• Sponsorship
Advertising media – which one to use?
Cost
Size of audience
Age, income, interests etc. of target audience
Message to be communicated
Other aspects of marketing mix
Legal and other constraints
Advertising expenditures and the trade cycle:
Advertising expenditures when economy is booming – spend more
Advertising expenditures when economy is in recession – spend less
Some believe that advertising is a luxury that can be afforded when sales and profits are booming.
Sale promotions: incentives such as special offers or special deals directed at consumers or retailers to achieve short
term sales increase and repeat purchases by consumers.
Below-the-line promotion: promotions that are not a directly paid-for means of communication.
Types of sales promotion:
Price promotions – A temporary reduction of the price.
Money-off coupons – Offers to save a certain amount of money for a limited period of time.
Customer loyalty schemes – These are used to encourage repeat purchases and discourage consumers from
shopping with competitors.
Money refund – Some businesses will give the customer their money back if then mail in a receipt.
BOGOF – Customers buy one product and get another one free.
 Name: Unit 3: Marketing Chapter 19 – Promotion & Place Date:

Point-of-sale displays – Gives the consumer a chance to try the product before they buy it.
Direct promotion methods
Direct mail:
 Direct information to potential customers.
 Can contain a great deal of information or just about sales next week.
 Cost effective.
 Can suffer from poor image and cause resentment at junk mail.
 Increasingly postal mails are being replaced by text messages and social media.

Personal Selling:
A member of sales staff communicates with one customer with the aim of selling the product and establishing a long
term relationship.
Telemarketing:
• All marketing activities conducted over the telephone (often from customer call centres), including selling,
market researching and promoting products.
• Telemarketing can be outsourced to an agency. They may charge for the cost of the script to be used.
• Lower cost than personal selling.
• Easy to monitor the response/rejection rate.
• Telemarketing has limitations:
• Many consumers object to cold-calling.
• It is very easy for consumers to reject a telemarketing message.
Digital promotion
• Social media marketing
• Email marketing
• Online advertising
• Smartphone marketing
• Search engine optimisation (SEO)
• Viral marketing
Benefits Limitations
• Worldwide coverage • Time-consuming
• Relatively low cost • Skills and training
• Easy to track and measure results • Global competition
• Personalisation • Complaints and feedback
• Social media communication builds customer
loyalty
• Content marketing
 Name: Unit 3: Marketing Chapter 19 – Promotion & Place Date:

• Website convenience increases sales

Progress check: Briefly do Activity 20.2 (part 1 & 2) – page 334
1 (855 − 623) ÷ 623 = 37.2% 2 Digital forms of advertising are cheaper than traditional advertising on television and
in national newspapers. TV adverts can cost (in 2020) $8m to film and $0.4m to show for 30 seconds on major TV
channels. A start-up adventure holiday firm lacks the finances to pay for this approach. Digital advertising is targeted
and cheap. For example, pay-per-click marketing on a business website costs (in 2020) around $10000 and search
engine optimisation can be bought for a further $10 000.
3 • Size of the marketing budget. The larger the budget, the greater the range of promotional options. A significant
budget will be required for national television advertising. • Target market. If the target market is younger
people, digital promotion through Instagram may be appropriate, whereas an older target market may
require more traditional forms of advertising. • Type of message that needs to be communicated. For
example, if detailed information must be communicated, written forms of communication will be more
effective (e.g. in newspaper adverts). • Nature of the product. This may mean that there are legal
constraints in particular countries (e.g. tobacco advertising). • The other elements of the marketing mix. If
the product uses premium pricing, this will influence the choice of advertising (e.g. premium perfumes
might be advertised in glossy magazines). • Evaluation could include an assessment of which factor is likely to be
most important in the different countries’ markets that the multinational sells to.
LO2: Assess the importance of packaging and branding in marketing of a product.
Packaging:
Functions of packaging:
 Protecting and holding the product
 Giving information about the product
 Supporting the product with other aspects of promotion
 Aiding product recognition
Factors to consider when making the packaging:
 What materials should it be made from? Are the materials cost effective?
 Does the size of the packaging make transporting the product easier or more difficult?
 Will the packaging be recyclable?
 Does the packaging make the product look unique and eye-catching?
Branding: The strategy of differentiating products from those of competitors by creating an identifiable image and
clear expectations about a product.
Brand extension: a strong brand identity can be used to support new or modified products i.e. mars chocolate to ice
cream.
Aims:
 Aiding consumer recognition
 Making the product distinctive from competitors
 Name: Unit 3: Marketing Chapter 19 – Promotion & Place Date:

 Giving product an identity or personality

Benefits:
 Brand recognition
 Differentiation from other products
 Establishment of a family of closely associated brands
 Reduce PED because of a famous brand
 Customer loyalty
Progress check: Briefly do Activity 20.4 – page 340 in your notebooks.

LO3: Analyse the importance of place in marketing mix and evaluate the main distribution channels.

Distribution channel:

What are the questions that

a business must answer in
deciding an appropriate
channel strategy

Concept of distribution and its objective:

Distribution: getting the right product to the right consumer at the right time

Objectives: will it be cheapest for a farmer to sell his/her products directly to consumers?
Will it be cheapest for a computer manufacturer to sell his/her products online?
Are the above two methods convenient for the consumers?

Cost is a major factor in distribution strategy but customer service is the key objective of distribution.
Why the distribution channel’s choice is important?
 Consumers may need easy access to the products to try before they buy.
 Name: Unit 3: Marketing Chapter 19 – Promotion & Place Date:

 Manufacturers need outlets for their products but with the desired image of the product appropriately
promoted.
 Retailers will demand a mark up so using a few or no intermediaries would be an advantage.
Direct selling: This distribution channels sells products directly from the manufacturer to the customer.
 This method has the most control over the marketing mix for the producer.
 Much quicker than the other methods.
 This method can be expensive because of shipping costs.
 Producer has to pay all storage and stocking costs.
One-intermediary channel: This channel is mostly used for consumer goods.

 This method is good for the producer as the retailers usually pay the storage and stocking fees.
 Retailers use product displays and offer after-sales services.
 These retail locations are much more convenient for the consumers.
 However, the producer loses some control over the marketing mix.
 Retailers will mark up the costs of the product.
Two-intermediary channel: This method of distribution uses a wholesaler.
 A wholesaler buys products in bulk from the producer and then sells them to different retailers in the area.
 The wholesaler pays for the transportation costs to the retailer which saves the producer money.
 The product now has to go through two steps before reaching the consumer which makes the product more
expensive.
 The two channels makes the distribution of products much slower than the other methods.

Internet marketing:

E-commerce:
Viral Marketing:
B2B: selling to businesses
B2C: selling to consumers

Benefits and limitations of internet marketing and E-COMMERCE

 Cheaper
 Worldwide audience
 Convenient
 Lower fixed costs
 Dynamic pricing
 Name: Unit 3: Marketing Chapter 19 – Promotion & Place Date:

 Accurate consumer records

However
 Slow speed or no computers in poor countries, tangible goods can’t be touched or felt, unreliable
and costly postal service in some countries and internet security fears.
Digital and physical distribution
• Products that can be converted into digital format are now being widely distributed to consumers by digital
means over the internet rather than in a physical form.
• Digital distribution bypasses the traditional physical distribution formats, such as paper, optical discs and film
cassettes.
• The processes involved in digital distribution include streaming and downloading of content.

Progress check: Briefly do Activity 20.6 – page 347.

Mix A: advertised on radio only. Radio may be poor at conveying the qualities of a sports car.
Mix B: sold only over the internet. Low-income families are less likely to have access to the internet or credit cards.
Mix C: low price. This is a fashionable hairdressing salon in a wealthy part of the city and the rest of the mix supports
high prices.
Mix D: product. A fast-food restaurant is less likely to support the other elements of the mix, such as a skimming
price strategy.
Mix A: an expensive sports car should be advertised in business magazines as these will be read by individuals with
higher incomes.
Mix B: a range of furniture for low-income families should be sold through discount furniture retailers. These
retailers will attract low-income families.
Mix C: a hairdressing salon using well-known stylists should charge high prices and offer no discounts, to convey a
message of exclusivity.
Mix D: a fine-dining restaurant serving locally produced seasonal food would be more likely to attract the target
market of business executives.
Exam Question Past Paper
Paper 2 – Analyse two suitable promotional methods that Steve could use to raise awareness of SS in the
town. [8]
Name: Unit 3: Marketing Chapter 19 – Promotion & Place Date: