15 The marketing mix:

promotion
This chapter will explain:
• the aims of promotion
• different forms of promotion and how they influence sales, for
example, advertising, sales promotion
• the need for cost effectiveness in spending the marketing budget
on promotion.
The role of promotion decisions
in the marketing mix
Promotion gives the consumer information about the rest of the
marketing mix – without it, consumers would not know about the
product, the price it sells for or the place where the product is sold. It
is often thought that promotion is just about advertising the product,
but it includes several different types of sales promotion as well as
advertising.
Commodities such as oil and iron are not advertised or promoted,
but nearly all processed and manufactured goods and most services
are. Most products are sold in competitive markets so advertising and
promotion have an important role to play in making them successful.
Producer goods are often sold directly by sales representatives
visiting businesses, but even these products are advertised in trade
magazines, or leaflets are sent out to businesses informing them
about the product.
Promotion is essential when a brand image, especially for
consumer goods, is being created for a product.
Promotion as part of the marketing mix includes the following:
• Advertisements – this involves ‘above-the-line’ promotions. These
can take different forms, such as advertising on television, via the
internet including social media, in newspapers and magazines, and
other forms of advertising media.
• Sales promotion – this involves ‘below-the-line’ promotions. These
are often used for short periods of time in order to reinforce the
above-the-line promotions. Examples include giving money-off
coupons or free gifts, or product placements in television
programmes or in newly released films.
The aims of promotion
As you can see, promotion includes many activities that are
undertaken by businesses. All these activities have one thing in
common – their objective – which is to raise awareness of a
business’s products and encourage consumers to make a purchase.
The specific aims of promotion are summarised in the diagram on the
next page.
Advertising
Advertising communicates to potential customers to encourage them
to buy a product. This is sometimes known as ‘above-the-line’
promotion.
Different types of advertising
Advertising can be either informative or persuasive. ‘1 million’ by
Paco Rabanne is an expensive aftershave. It is not sold by telling
people all about what it will do for the skin. The advertising is meant to
make consumers think that when wearing the aftershave they will
smell nice to the opposite sex and look more attractive. The adverts
for the aftershave used in magazines show a picture of an attractive
man, which is meant to persuade the readers to buy the aftershave so
that they will be attractive like the man in the advert.
Would consumers buy a laptop that was shown in adverts as being
used by an attractive person, but with no technical information
provided? Probably not. When buying a laptop or tablet, consumers
want to know what speed it will run at and what memory it has. They
want information about the product and its price.
The advertising process
When planning an advertising campaign the business will need to go
through the steps shown in the diagram on page 187.

The following table shows types of advertising media that businesses

can use, together with the advantages and disadvantages of each and
some examples of when they may be used.
Key info
It is estimated that total global expenditure by businesses on
promotion in 2017 was US$1 trillion, of which US$552 billion was
spent just on advertising.

Case study
ING is a global institution of Dutch origin, offering banking,
investments, life insurance and retirement services. As it is a large
international business, it can afford a large marketing budget. It uses
advertising on the internet, television, magazines and billboards.
Activity 15.1
Read the case study above.
Do you think ING’s current methods of advertising are the best
methods to use or should it change them? Explain your answer.

REVISION SUMMARY
Types of advertising media
Activity 15.2
a Choose ten products which you and your friends buy regularly.
Collect examples of the advertising for them and write down where
the products are advertised. Copy out the table below and fill in
the blanks when you have all your examples.

After you have filled it in:

b What can you observe from your completed table?
c Do the places where the adverts are found suggest a particular
target audience for the products?
d Is the target population a very large number of people or a
relatively small number of people?
e Do the places suggest the product is only sold locally or also
nationally?
f Are these findings what you expected? Explain your answer.

Study tips
Make sure you can select suitable types of advertising for particular
products and explain why they are suitable.
Activity 15.3
For each of the following products, decide on the best advertising
media to use. Explain your choice in each case.
a Nike, which produces an established brand of sports shoes that is
sold to teenagers as a leisure shoe, wants to become more
competitive with rival companies. This product is sold in many
areas of the country.
b A new bicycle has been produced which is suitable for using over
rough ground and for cycling up mountains.
c A new computer game has been developed.
d A new restaurant in a small town has opened.
e A famous brand of carbonated soft drink wants to expand its sales.
f A local town is holding a festival.
Sales promotion
Different types of sales promotion
Promotion is used to support advertising and encourage new or
existing consumers to buy the product. This is sometimes known as
‘below-the-line’ promotion.
Sales promotion is used in the short term to give a boost to sales,
but it is not used over long periods of time. An example of this might
be when a new chocolate bar has been introduced on to the market
and is being advertised on television. In the shops where the
chocolate bars are to be sold, free samples may be given out to
encourage the customers to try the new chocolate bar and, if they like
it, to become regular buyers.
There are several different types of sales promotion that can be
used by businesses.
After-sales service
With expensive products, like cars or computers, providing an after-
sales service can be a way of encouraging the customer to buy. They
can be reassured that, if the product goes wrong in the first few weeks
or months after they have bought it, they will be able to take it back
and get it repaired with no additional charge to themselves. This may
make the customer buy from a shop that offers an after-sales service
rather than from somewhere that does not.
Gifts
Sometimes small gifts are placed in the packaging of a product to
encourage the consumer to buy it. This is often used with products
like breakfast cereals and the gifts are usually aimed at children.
Sometimes coupons are put on the back of packets and have to be
cut out and collected. When a specific number have been gathered
they can be exchanged for a gift, such as a book. If the item on offer is
more expensive, the coupons may be exchanged for the item but a
small additional charge may also have to be paid. Collecting coupons
requires several packets of the product to be purchased before the gift
can be claimed and so several packets of the product will be sold. The
aim is that the customer may continue buying the product even after
the promotion has ended.
BOGOF
This is where multiple purchases are encouraged (for example, ‘Buy
one, get one free’).
Price reductions
Examples include reduced prices in shops at specific times of the year
and money-off coupons to be used when a product is next purchased.
These can be linked to loyalty cards and customers sent money-off
coupons after they have spent a certain amount of money at the shop.
Money-off coupons are sometimes found on the bottom of leaflets, in
newspapers or on the packet of the product itself, for example, ‘$1.00
off your next packet’. This encourages the consumer to try the product
and hopefully they will become a regular customer. ‘Flash sales’ are
big discounts on certain products for a very limited time period –
sometimes just an hour or two. These can be advertised on the
internet or ‘in-store’ as customers are browsing in the shop or emailed
directly to potential customers.
Competitions
The packaging of a product may include an entry form which allows
the customer to enter a competition. The prize is often an expensive
item, such as a car. This again obviously encourages the consumer to
buy the product.
Point-of-sale displays and
demonstrations
Point-of-sale is the place where the product is being sold – usually a
shop.
In the shop, there may be a special display of the product. With
some products it can be an advantage to show how they should be
used and therefore a demonstration in the shop can be a good way of
encouraging customers to buy.
Free samples
This is most commonly used with products like food, shampoo and
cleaning products. A free sample can be handed out in the shop to
encourage the customer to try the product and hopefully buy it. Free
samples can be delivered to people’s houses – although this would
not be to every person’s house, just the neighbourhoods where the
business thinks people will buy the product. Free samples can also be
given away with other products. For example, new washing machines
often contain a free sample of washing powder.
Product placement
This is when branded goods and services are featured in television
programmes, movies or music videos. Products are associated with
the image in the programme or movie. A specific audience who view
the programme, movie or music video can be targeted. However, it
can be expensive to pay for the placement of the product in the
programme and it may have negative effects on the consumer if the
image is not attractive to them. Expensive, high-powered cars used in
James Bond films that portray excitement and speed are a good
example of successful product placement.

Study tips
Make sure you can select a suitable sales promotion for particular
products and explain why it is suitable.

REVISION SUMMARY
Types of sales promotion
The advantages of sales promotion
• It can promote sales at times in the year when sales are traditionally
low (off-season purchases).
• It encourages new customers to try an existing product.
• It encourages consumers to try a new product.
• It encourages existing customers to buy a product more often or in
greater quantities, increasing consumer loyalty.
• It encourages customers to buy your product instead of a competing
brand.

Activity 15.4
Choose ten products which you and your friends buy regularly.
Collect examples of sales promotions that have been used for these
products and explain why these methods of promotion were used.

Activity 15.5
For each of the following five products decide the best method of
sales promotion to use. Explain your choice in each case.
a A new magazine aimed at teenage boys.
b A new type of pen which is very comfortable to use and does not
smudge.
c A company making a famous brand of football boots wants to
expand sales.
d A new fast-food takeaway opens in a small town.
e A soft toy has been invented that changes colour when hugged
and can be dressed in different clothes which also change colour
when warmed.
Key info
The use by McDonald’s restaurants of the ‘Monopoly’ game as a
form of promotion, turning peeling stickers into a high-stakes game,
has been one of the most successful sales promotions of all time.
Over US$1 billion in cash and prizes have been given away in the
last ten years. During this period McDonald’s sales have increased
by 25 per cent and some analysts believe that much of this growth
has been due to Monopoly.

Case study
Mattel sells a range of Barbie dolls for young children. They are sold
through toy shops, where a special stand is provided for the shop to
display the dolls so that they are easily seen by customers. A new
Chinese Barbie doll in the range has just been introduced. To show
children the new doll and its range of clothes, a representative of the
company is visiting toy shops to demonstrate the doll and its
accessories. Also, with each purchase of the new doll there is a
chance to enter a prize draw – the first prize is a trip to Disneyland.

Activity 15.6
Read the case study on page 193.
Do you think all these ways to promote this range of Barbie dolls will
be effective? Explain your answer.
The importance of the marketing
budget
When deciding which type of promotion (advertising and sales
promotion methods) will be most suitable to use for a particular
product, the marketing budget is perhaps the most important factor.
So, the size of the marketing budget is crucial. It specifies how
much money is available to market the product or range, so that the
Marketing department knows how much it may spend. If the business
cannot afford a very large budget, this will limit the places where the
business can advertise. For instance, if the budget is small then
television advertising will not be possible, and the number of times
adverts appear in a magazine could be higher if the budget was
larger.
The need for cost effectiveness in spending the marketing budget is
very important. A business will need to compare the cost of
advertising with the increase in expected sales. It is not good to spend
large amounts of money on an advertising campaign if there is only a
small increase in sales.
Small businesses will find it very difficult to compete with larger
ones because of the large marketing budget available to them.
Which type of promotion should be
used?
The following points also need to be considered when deciding on the
type of promotion to use:
• The stage of the product life cycle that has been reached. Read
Chapter 12, page 165, to see which stages of the life cycle require
different methods of promotion. If the product is new and has just
been launched the advertising may be more informative, but if the
product is well established and is at maturity then the advertising
may be persuasive.
• The nature of the product itself. If the product is a producer good,
the type of promotion that would be used when promoting the
product to other producers would be quite different to the methods
used with consumer goods. For example, money-off coupons would
not be suitable, but discounts when goods are purchased in bulk
would be appropriate. Businesses would not be influenced by
collecting money-off coupons, but they will buy in large quantities
and will be influenced by a discount. A product sold to other
businesses, for example, a machine to wrap perfume, will not be
advertised in the same way as the perfume itself, which will be
bought by consumers. The advertising for the machine will be
informative, while the advertising for the perfume will be persuasive.
• The cultural issues involved in international marketing. If the product
is to be sold abroad then different types of promotion may be
appropriate. The advertising media used will be dependent on
factors such as the number of televisions owned, literacy of the
population, availability of radio and cinema. It is no use advertising
in a national newspaper if most of the population do not read or
cannot afford a newspaper. Free samples, competitions, special
offers, and so on, will also have to be suitable for the culture of the
population. In some countries it might not be usual to enter
competitions and therefore this promotional route would not act as
an attraction to buy the product. The business might need to
consider the types of promotion in terms of what is acceptable to
 people in the countries where the product is being sold. For
instance, the use of women in adverts or the promotion of alcohol
would not be allowed in some parts of the world.
• The nature of the target market – whether it is local, national or
international and its size – a local market will require different media
to a national or international one. Is the product a specialist product,
such as water skis, or is it one that is sold to the majority of the
population, such as cola? If the target market is mainly formed of
young people then social media could be the most effective form of
promotion to use.

Study tips
Remember that advertising does not necessarily increase sales and
profits. A lot of money can be spent on advertising and not be
effective. Advertising may increase sales, but if prices have been
reduced and advertising expenditure increased then profits may not
increase.
Public relations/sponsorship
This is concerned with promoting a good image for the business
and/or its products. Public relations can take many forms, from
sponsoring events such as football matches, to publicity stunts where
employees, or owners of the company, take part in a sponsored
activity for a good cause or to raise awareness.

Another example is where companies donate some of their products

to charity – for relief when there has been a natural disaster, or food
for victims of a famine.
All these types of activity raise the public’s awareness of the
company and its products, and increase the likelihood of their
choosing its products over its competitors’.
International business in focus
Justin Bieber
Justin Bieber is a Canadian pop/R&B singer, songwriter and actor.
He was discovered in 2008 by Scooter Braun, who came across
Bieber’s videos on YouTube and later became his manager. Justin is
very popular, particularly among younger age groups. He is
preparing to go on a world tour. The tour will involve concerts in
many countries around the world and it is predicted that tickets for
his concerts will be sold out very quickly.

Discussion points
• Discuss the best way for the tour dates of the concerts to be
advertised.
• Choose another singer and consider what other promotions could
be used to promote them and their music.

Exam-style questions: Short answer and

data response
1 TP manufactures expensive shoes for women. It sells its range of
shoes through shops which also sell made-to-measure designer
clothes for women. ‘We need to be clear who our target market is,’
says the Marketing Manager. TP’s Directors want to reduce costs
to try to improve profitability. One Director thinks that as TP is a
well-known business, advertising is a waste of money.
a Define ‘target market’.
[2]
b Identify two examples of advertising TP could use.
[2]
c Outline two reasons why it is important for TP to know the
target market when deciding how to advertise the shoes.
 [4]
d Explain two possible aims for TP’s promotion.
[6]
e Do you think advertising is needed for TP’s range of shoes?
Justify your answer.
[6]
2 FK is a partnership and it manufactures drinking glasses.
Customers pay FK to put their own designs or messages on the
outside of the glass. These are often given as gifts at weddings,
births or other special celebrations. FK is planning to also
manufacture plain glasses for everyday use. These glasses would
be sold in supermarkets, but the specially designed glasses can
only be ordered on the internet. FK only has a small marketing
budget so the owners will have to think carefully about where will
be the best place to advertise the plain glasses.
a Define ‘marketing budget’.
[2]
b Identify two places, other than the internet, where FK could
advertise its glasses.
[2]
c Outline two reasons for promoting the plain glasses.
[4]
d Explain two methods of sales promotion FK could use to
promote the plain glasses sold in supermarkets.
[6]
d Do you think the promotion of the plain glasses should be
different to the promotion used for the specially designed
glasses? Justify your answer.
[6]
Revision checklist
In this chapter you have learned:
about the role of promotion decisions in the marketing mix
about the aims of promotion
differences between advertising and sales promotion
how to select appropriate types of advertising and sales promotion
for different products/business objectives
how to spend the marketing budget effectively
the importance of the marketing budget in making promotion
decisions.
NOW – test your understanding with the revision questions in the
Student etextbook and the Workbook.

Definitions to learn
Promotion is where marketing activities aim to raise customer
awareness of a product or brand, generating sales and helping to
create brand loyalty.
Advertising paid for communication with potential customers about
a product to encourage them to buy it.
Informative advertising is where the emphasis of advertising or
sales promotion is to give full information about the product.
Persuasive advertising is advertising or promotion which is trying to
persuade the consumer that they really need the product and should
buy it.
The target audience refers to people who are potential buyers of a
product or service.
Sales promotions are incentives such as special offers or special
deals aimed at consumers to achieve short-term increases in sales.
A marketing budget is a financial plan for the marketing of a product
or product range for a specified period of time.