GCSE Business Studies/Promotion

Why do firms promote?

To introduce a new product onto the market.
To increase sales of an existing product.
To improve the business's image.
To compete with other firms.

Types of Promotion

There are two main types of promotion:

Persuasive promotion attempts to persuade the consumer that he or she needs the product.
Informative promotion attempts to give information about the product, usually in an impressive sounding way. This is often used by the Government, for example to inform people of new laws.

Advertising Media

The way in which an advert is communicated is known as the medium. The medium a firm chooses will depend on its advertising budget, it's target audience, and the size of it's market.

Broadcast Media

Broadcast media can attract the consumer's attention more than other types of media, and have a larger target audience.

Television adverts can make use of colour, sound and motion (in other words, they are 'high impact'). They can reach millions of people, and can also be targeted quite well towards people who watch particular programmes. However, it is a very expensive way of advertising and the adverts are often missed or ignored.
Radio adverts are cheaper to produce and broadcast, and can still be targeted towards listeners of particular stations. However, there is a smaller audience and often do not attract attention. They are sound only, so may not be as effective.
Cinema adverts have a high impact and can be targeted towards particular films. They are unique because they are shown to an attentive audience. However, since it is usually only seen once, it is easily forgotten by the consumer.

Printed Media

Printed media can be kept for future reference, and can often give more information. However, they have less impact because it cannot use sound and movement, and may not be in colour.

National newspapers can be seen by a large audience over a whole nation, but are often expensive to advertise in.
Local newspapers get the message across to a large number of people in a given area, and are usually cheaper to advertise in than national newspapers.
Magazines are useful because they can target either a broad or a very specific group of people (e.g. a fishing magazine will be read by people interesting in fishing).
Leaflets and junk mail are very cheap and easy to produce and distribute, and can be good for targeting a specific group of people. However, they are just as easy to ignore.

Other Media

Posters and billboards will be seen often by people in a certain geographical area. They have a high visual impact and stay in place for a long time. However, they cannot contain detailed information and have to communicate their message quickly because they are often only seen for a few seconds. And they are vulnerable to wind, rain and graffiti.
The Internet is a fairly cheap advertising media and can give good amounts of information. They can have a good visual impact, can be interactive and link directly to buying the product. However, not everyone has Internet access and since there are lots of adverts they are often simply ignored.

Sales Promotion

Sales promotion may be referred to as 'Below the line' promotion because it does not use the media, or 'Point of sale' promotion because it is used at the point of sale. Some common sales promotion methods include:

Price reductions / Discounts involve reducing the price of a product (for example using coupons), to encourage customers to buy it.
Gifts can be free objects that are given to a customer when they purchase the product, or buy-one-get-one-free (BOGOF) offers.
Point-of-sale displays make the product stand out from others through the use of a special display where it is being sold. These are often seen in supermarkets.
Credit may be given on some products, which allows the customer to buy the product now and then pay for it later.
After-sales service is given on some products in order to reassure the customer that if anything goes wrong, help will be given.

Public Relations

Public Relations (PR) is often free publicity. This can either be good or bad, but the outcome is the same: it helps a business get their name well known. Large companies may have a PR department, which makes sure that any new stories about the company show it in a good light. Some news events about the company may have been made up by the company themselves. These are called PR stunts. For example, in Charlie & The Chocolate Factory, Willy Wonka starts a competition for consumers to find five golden tickets hidden in his chocolate bars. Another way companies get publicity is to pay television and film companies to use the company's product in their films and TV shows. This is called product placement.