Year 12 – Marketing Notes – No Name Decided!
Promotion
Definition - Promotion describes the methods used by a business to inform, persuade and remind a
target market about its products.
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For a business to sell more of its products, it first has to change consumer's behaviour through
information or persuasion. This is achieved through promotion
Promotion attempts to:
Attract new customers by heightening awareness of a particular product
Increase brand loyalty by reinforcing the image of the product
Encourage existing customers to purchase more of the products
Provide information so customers can make informed decisions
Encourage new and existing consumers to purchase new products
Elements of the promotion mix
Promotion mix is the various promotion methods a business uses in its promotional campaign.
Methods include:
 Advertising
 Personal selling and relationship marketing
 Sales promotion
publicity and public relations
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Advertising
 Advertising is a paid, non-personal message communicated through a mass meeting
 Businesses advertise in order to increase sales and profit
 The form and presentation of advertising have to change over time
 The main advantage of advertising is that it provides businesses with the flexibility to reach an
extremely large audience or to focus on a small distinct target market segment
Advertising Media
Definition - Advertising media refers to the many forms of communication used to reach an audience
 Advertising can take many forms, from buying time on national television, to inexpensive leaflets
or posters, to internet banner
 Advertising media is a term for the many forms of electronic and print communication used to
reach an audience
 The six main advertising media includes:
1. Mass marketing - television, radio, newspapers and magazines
2. Direct marketing catalogues - catalogues mailed to individual households
3. Telemarketing - the use of the telephone to personally contact a customer
4. e-marketing - the use of the internet to deliver advertising messages
5. Social media advertising - online advertising using social media and platforms such as Facebook
6. Billboards - large sings place at strategic locations
Personal Selling
Definition - Personal selling involves the activities of a sales representative directed to a customer in an
attempt to make a sale
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Although personal selling is an expensive promotional method, businesses are willing to spend the
money on it because it offers three unique advantages
1. The message can be modified to suit the individual customer's circumstances
2. The individualized assistance to a customer can create a long-term relationship resulting in repeat
sales
3. The sales consultant can provide after-sales customer service in relation to product features,
installation, warranties and servicing
Relationship Marketing
Definition - relationship marketing is the development of long-term, cost-effective and strong
relationships with individual customers
 The ultimate aim is to create customer loyalty by meeting the needs of customers on an individual
basis thereby creating reasons to keep customers coming back
Sales promotion
Definition - sales promotion is the use of activities or materials as direct inducements to customers
 The types of promotion is referred to as sales promotion and aims to:
1. Entice new customers
2. Encourage trial purchase of a new product
3. Increase sales to existing customers and repeat purchases
 Sales promotion technique are used primarily to increase the effectiveness of other promotion
activities, especially advertising. Examples of special promotions are:
1. Coupons - offer discounts of a stated amount on particular items at the tome of purchase
2. Premiums - a premium is a gift that a business offers to customers in return for using product
3. Refunds - part of the purchase price is given back to those customers who send in a voucher with
a specific proof of purchase
4. Samples - a sample is a free item or container of a product
5. Point-of-purchase displays - special signs, displays and racks are supplied and installed by the
manufacturer in retail outlets. They are usually located at the end of aisles in supermarkets to gain
consumer attention and make more efficient use of the floor space
Publicity and public Relations
It is the activities aimed at creating and maintaining favorable relations between a business and its
customers.PR exposes a business or idea to an audience by using often unpaid their parties as
outlets. This can be done by working with the media, by making speeches on special occasions or by
some other gesture.
There are four main ways in which public activities can assist business in achieving its objective of
increased sales
1. Promoting a positive image
2. Effective communication of messages
3. Issues monitoring
4. Crisis management
The Communication Process
Marketing managers must be able to communicate clearly, efficiently and succinctly to their target
market. If the communication process becomes distorted or inefficient, the message becomes
distorted. Without effective communication promotion is wasted.
Channel – A channel is any method used for carrying a message
Noise – is and interference or distraction that affects any or all stages in the communication process
Opinion leader – It is person who influences others.
Word of Mouth – This occurs when people influence each other during conversations
PLACE
MISSING!! 8.7 Place/Distribution
When businesses manufacture a product, it must see that the product gets into customers
hands
For this to happen, a distribution system is required
Distribution is important because most products are not used by the same business that made
them
Distribution Channels
Channels of distribution are routes taken to get the product from the business to the
customer
The process usually involves intermediaries
 Wholesaler
 Broker
 Agent
 Retailer
Other intermediaries are often invisible with customer knowing very little about their role
and operation
Traditional Distribution Channels
Producer to customer
 This is the simplest channel and involves no intermediaries. Most services use this
method
Producer to retailer to customer
 A retailer is the intermediary who buys from producers and resells to customers.
This channel is often used for bulky or perishable products
Producer to wholesaler to retailer to customer
 Most common method of distribution for common goods. Wholesalers are
intermediaries who buys the products from the producers and resells them in
smaller quantities
Producer to agents to wholesaler to retailer to consumer
 Agent distributes products to wholesalers but never own the product
 Businesses that do not have any sales representatives will usually use an agent
instead
Innovative distribution methods – non store retailing
Non-store retailing - retailing activity conducted in a non-traditional way
 Using newer tech to help distribute products such as e-marketing
Telemarketing
The use of interactive technology to make a sale
Internet marketing
Rush by businesses to use the internet as a promotional tool
Easy for any business to obtain a domain name and to market via the
internet
As more people shop online, traditional distribution channels are
modified
Retailers and wholesalers are bypassed because consumers sometimes
deal directly with the manufactures
Channel Choice - Including intensive, selective and exclusive
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Market coverage refers to the number of outlets a firm chooses for its product
Three different ways to distribute a product
1. Intensive distribution
When the business saturates the market with its product
They want as many of their products in the market as possible, adds their product to the
limit
Convenience goods
2. Selective distribution
Using a moderate proportion of distribution, the business selects which outlets they
want to distribute too
Clothing, furniture, and electrical appliances
3. Exclusive distribution
The use of one retail outlet for a product in a large geographic area
Physical Distribution Issues
All the activities concerned with the efficient movement of the products from producer to the
consumer
Physical distribution
 The movement of products through their channels of distribution
Transport
 Intricate transportation networks are used to get products to the shelves
 The way the business transports its product will largely depend on the type of product
and the degree of service the business wishes to provide
 Most common methods are rail, road, sea and air
Warehousing
 Activities to do with the storage of products, and also the dispatch of them
Inventory
 Inventory control is a system that maintains quantity and the varieties of products
appropriate for the target market
 Finding the equal balance between too much stock and too little stock
8.8 People, Processes and Physical Evidence
The four P’s (Price, product, place, promotion) are considered appropriate previously, however as the
service sector expanded. Approach was considered out-dated and only appropriate for tangible
products
 Three more P’s were added to compensate
 Applicable for services
 Mainly applies to intangible products
 People
 Processes
 Physical evidence
People
 Refers to the quality of interaction between customer and those within the business who will
deliver the service
 Consumers make perceptions and decisions based on how employees treat them
 Customers’ experience must reach reality
Processes
 Refers to the flow of activities that a business will follow in its delivery of a service
 The process is highly efficient to achieve customer satisfaction if it does not involve a tangible
product.
 Inefficient processes will lose customers and damage its reputation. Such as keeping customers
waiting for hours would lead to customer dissatisfaction and create a bad impression about the
restaurant.
Physical Evidence
Refers to the environment in which the service will be delivered
Includes materials needed to carry out the service such as signage, brochure and business logo
It is often difficult to provide physical evidence such as a by offering a free trial when it comes to
intangible goods
E-MARKETING
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Main technologies for e-marketing include
o Web pages
o Podcasts
o SMS
o Blogs
o Web 2.0
Web Pages
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Makes use of the world wide web to convey information in the form of text, graphics, animation
and video
Searching for the website of a particular business the user will normally be directed to the
business home page
o Contains basic knowledge about the company
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Provides information on
 Location of the business
 Available products
 Online ordering facilities
Podcasts
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Involves the distribution of digital audio or video files
Directed to a normal users who subscribe to that particular podcasting service
Businesses may use podcasts for marketing and advertising purposes
If a particular podcast is aimed at the same audience as the target customers of a business
o Can be a very effective way of reaching those consumers
SMS
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This is where text messages can be sent between mobile phones
SMS has distinct advantages over email in that messages are delivered automatically to one or
more recipients without the need for them to dial in or log in
Can be used to alert regular customers of any special deals on offer and notify suppliers of the
arrival of a goods shipment
Blogs
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Abbreviation to weblog
o Refers to an online diary or journal
o Usually possible to add comments or ask questions
Many businesses set up external blogs
o Allow for communication between the business and its existing/ potential consumers
As a public relations exercise an external blog can have the following advantages
o Allow for business owner and employees to establish a reputation for expertise
 Providing detailed information about products or services
o New ideas for products and services can be put to the public to gain comment and
feedback
o Can presne a human face to the public and build trust with customers
Web 2.0
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Web 2.0 refers to transformation of the world wide web into a more creative and interactive
platform
Development of social media networks
o Facebook
o Twitter
Video sharing
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o YouTube
Information sites
o Wikipedia
Rather than hire a web-page designer, the technology allows an amateur to upload home video
footage, photos and other graphics on to a networking site
o Allowable to be viewed by existing and potential customers
Networking sites can also accept paid advertising that links to the sites search engine
GLOBAL MARKETING
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Within foreign markets businesses will be faced with a marketing environments/target markets
that differ from the domestic scene
Transnational corporations (TNCs) adopt a global marketing approach
- Standardised approach
- Entire globe = one large market
Rely on market research to understand the complexities of the global marketing environment
before designing the marketing mix
- Analyse overseas markets
Information about external country’s economic, political, social and cultural features should be
gathered
Global Branding
 The worldwide use of a name, term, symbol or logo to identify the seller’s products
 Global branding is used because:
- Cost effective because one advertisement can be used in a number of locations
- Uniform worldwide image
- Successful brand name can be linked to new products being introduced into the
market
 One of the most valuable resources a company has – e.g. McDonalds, Coca-Cola etc.
 Global branding equates to global recognition – irrespective of language barriers
Standardisation
 Global marketing strategy that assumes the way the product is used and the needs it satisfies
are the same worldwide
 Cost savings for the business
- Production runs can be longer thereby achieving economies of scale
- Research and development costs are reduced
- Spare parts and after-sales service are simplified
- Promotion strategies can be standardised
Customisation (local approach)
 Global marketing strategy that assumes the way the product is used and the needs it satisfies
are different between countries
 Marketing plan to be customized according to the economic, political and sociocultural
characteristics of the target country
 A combination of both strategies is sometimes used
- E.g. McDonalds creating a generic name, logo and production method however
there are local menu variations
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For example beer is served in France and Germany, sake in Japan and noodles in
the Philippines
Global Pricing
 How businesses coordinate their pricing policy across different countries
 Global pricing is the most critical but complex issue that global businesses have to deal with as
pricing is the only element of the marketing mix that generates revenue
 Business’s global pricing strategy is a major determinate of profit
 A global business can implement one of three global pricing strategies:
Customized Pricing
 Customized pricing - occurs whenever consumers in different countries are charged
different prices for the same product
 In determining the price for an overseas market, global businesses practice the cost-plus
method to cover the added costs of exportation
 Such cost include transportation, taxes, warehousing and tariffs
- Tariff – is a tax on an imported product.
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Market- Customized Pricing
Market-customized pricing – sets prices according to local market conditions
Global businesses may need to adopt a market-customized pricing strategy that allows
marketers to vary the price depending on the level of demand and competition overseas
- (for example, the price charged may have to be lower than in a market where
the business has a monopoly)
The price charged in other countries is also influenced by foreign currency exchange rates
Fluctuations in the exchange rate can change the prices charged across countries and is a
major risk for global businesses.
Standard Worldwide Price
 Standard pricing – is the practice of charging customers the same price for a product
anywhere in the world
 It will only succeed if the foreign marketing costs remain low enough not to affect overall
costs
 There a two major risks associated with this strategy:
- A domestic business may undercut the standardized price
- Changes in the exchange rate may negatively impact on the exported price
Competitive Positioning
 Relates to how a business will differentiate its products
 Similar to domestic markets, global businesses must clearly show how its products are better
than the competitors’ products
 Strive to develop product leadership, positive customer relationships and operational excellence
 Businesses must gain a deep understanding of their dynamic environment in which they operate
 Form strategies according to evolving conditions