GCSE Business Studies Marketing Mix - Promotion Activity With the person next to you, list all of the methods that you can think of that businesses use in order to promote their products. Activity Divide the list into three 1. Used by small companies only 2. Used by large companies 3. Used by both Add any more methods you can think of Activity Have you included the following for small businesses on a low budget • Local newspapers • Internet • Personnel Recommendation • Business cards The Importance of promotion Promotion is concerned with how a business is to market its product. A business must inform customers that it has a product to sell, and make customers feel that they need to buy the product. Linking Promotion to the other Ps. Product The product needs to be brought to the attention of the consumer. Promotion could extend a product life cycle Price Some promotions can focus on price Place A business may need to inform customers of a new shop opening or where the product is on sale. The aims of promotion • To inform customers about a product (especially when new or changed) • To keep a business ahead of its competitors • To create or change the image of a business • To create a brand and customer loyalty • To maintain or increase sales • To inform customers about where they can buy a product/service Methods of Promotion There are many different methods of promotion that a business might use. These include: Sales promotion. 2. Public relations. 3. Sponsorship. 4. Advertising. 1. 1. Sales Promotion Sales Promotion can be divided into many parts: Price reductions: e.g. Jan sales (to get rid of old stock) Loss leaders: Often used by supermarkets. Essential products are reduced so that there is little or no profit being made. This brings customers into the store Added Value: Often used by the food industry. Involves giving 30% extra free etc. 1. Sales Promotion Gifts: May be given with a product in order to increase sales. Eg: Breakfast Cereals. Point of sale: Large display of a certain product near the entrance/tills. Used by supermarkets Competitions: Used to boost sales, where customers are entered into a prize draw. Free samples: Used in cosmetics and other businesses to let the consumer try the product. 1. Sales Promotion Merchandising: When a new film is released, certain products on sale are connected to the film. After-sales service: Can also be used as a sales Sales promotion taskor extend an promotion. A business may offer existing guarantee. BOGOF or 3 for 2: Means that people buy more of the product 1. Sales Promotion - Task 2. Public relations PR involves managing information between the company and the public The main difference between Public Relations (PR) and other promotion methods is that PR is often free. It can include winning industry awards, working with the press, organising launch events PR brings the business to the attention of the public at no cost. 2. Public relations - Task Question: Explain how a local business like the Metro café in Bingham could partake in PR 3. Sponsorship Sponsorship is becoming an ever popular method of promoting businesses. Though the sponsor may have a personal interest in the team, there is a clear business aim in promoting the name of the business to as wide an audience as possible. With sport on TV, there is an increasing opportunity for a business to make its products known to a world-wide audience. 3. Sponsorship - Task Name 5 companies and the events/programmes they sponsor 4. Advertising Advertising is giving information to the public and persuading them to buy a particular product or service Examples include • TV (national and local) • Radio (national and local) • Leaflets/flyers • Bill boards • Notice boards 4. Advertising - Task How could a small company like Metro Café advertise?