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LO – to understand and be able to
explain the role of Promotion
The British International School Shanghai
So what is promotion?
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List your ideas
Promotion refers to all the ways of spreading
information about a product, brand or company
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Advertising on radio, TV, cinema, newspapers,
internet
Sponsoring events, sales promotion, merchandising,
trade shows and PR – all these combined is the
Promotional Mix
4 key parts of the Promotional Mix
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Advertising
Sales promotion
Public relations
Personal Selling
You must get the mix right!
The pipeline…
INTO the pipeline refers to:
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Methods used to sell into the distribution system
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Aimed at wholesalers and retailers NOT final
customers
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E.g Dealer loaders = 20 for the price of 10,
display units, dealer competitions, extended
credit, sale-or-return etc
All types of promotion aimed at the
distributors of your product – NOT the
consumer…
Promotion OUT of the pipeline…
These help in promoting and selling to the final customer
 Free samples
 Trial packs
 Coupon offers
 Price reductions
 Competitions
 Demonstrations
 Point of sale materials
All the key methods of promotion aimed at
the end user
The 4 forms of promotion
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The following are the 4 main ways businesses
promote:
1 Sales promotion
 Designed
to increase sales through media and nonmedia methods, specifically in the short term.
(if it was a long term drop in price it would be a pricing
strategy, not a promotional technique)
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BOGOF – buy one, get one free, 3 for 2 etc
Coupons/vouchers/gift cards/points etc
Point of sale displays
Competitions
Free gifts or samples
2 Personal selling
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Oral communication (often face to face) where the
aim is to make a sale.
Initially the seller will try and build a relationship by
looking for what the customer needs
They will ‘sell’ (talk about) the benefits of the
product that meet those needs/wants
The final stage is to ‘close’ the sale – the seller must
‘ask for the order’
3 Public relations
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Managing the flow of information from the business
to its ‘public’ in order to build the reputation of a
company and its brands
Any activity which does this is termed PR
 Publicising
a charity event
 Informing customers about a new product
 Advertising to show the company in a positive light
 Sponsorship
4 Advertising
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Widely used form of above the line promotion
Can be done via the following media:
 TV,
radio, internet, posters, newspapers, billboards,
leaflets, flyers, digital billboards (Times Sq.)
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Aims to get attention and make consumers aware of
your products, demonstrating how good they are
It can be used to ‘remind’ customers
Above and below the line ADVERTISING!
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In a nutshell, ATL promotions are tailored for a mass audience
BTL promotions are targeted at individuals according to needs or preferences.
While ATL promotions can establish brand identity, BTL can actually lead to a
sale. ATL promotions are also difficult to measure well, while BTL promotions
are highly measurable, giving marketers valuable insights into their return-oninvestment.
Promotional activities carried out through mass media, such as television, radio
and newspaper, are classed as "above the line" promotion. "Below the line"
promotion refers to forms of non-media communication or advertising, and has
become increasingly important in the communications mix of many companies,
not only those involved in fast moving consumer goods, but also for industrial
goods.
"Through the line" refers to an advertising strategy involving both above and
below the line communications in which one form of advertising points the
target to another form of advertising thereby crossing the "line".
1 What is Promotion?
Promotion may be defined as:
a communication with actual or potential customers
b the application of advertising to increase sales
c the attempt to develop the public image of the business
d the method of getting goods to market
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2 Which of the following is an example of abovethe-line promotion?
a sales promotion
b direct mailing
c advertising in a magazine
d sponsorship
3 Which of the following is not an
example of a sales promotion?
a money-off coupons
b BOGOF
c point-of-sale display
d personal selling
4 A large firm selling industrial goods is least likely to
use which of the following forms of promotion?
a trade fairs
b advertising in specialist magazines
c personal selling
d TV commercials
5 In the marketing mix, place is concerned
with:
a channels of distribution
b location of manufacturing activity
c niche marketing
d mass marketing
6 Which of the following is the most
likely disadvantage of direct selling?
a The intermediary takes a profit mark-up.
b The producer loses control over the marketing mix.
c Storage and stock costs have to be paid for by the
producer.
d The producer has delivery costs to the retailer.
7 Viral marketing includes:
a the use of sms text messages
b direct selling to the consumer
c sponsorship
d the use of intermediaries to transfer the good to a
wider audience.
Answers 1 to 3
1 Promotion is not just about advertising; other techniques include direct selling and
sponsorship. Promotion may be summed up as the firm’s attempt to communicate
with actual or potential customers.
Correct answer: a
2 Above-the-line promotion involves advertising through the media.
Correct answer: c
3 Sales promotion is the use of short-term incentives to purchase.
Correct answer: d
Answers 4 to 7
4 A firm selling industrial goods needs to choose promotional methods to communicate with
customers – other businesses. TV commercials are unlikely to represent an effective form of
promotion to reach business customers. TV is primarily used for consumer goods and services.
Correct answer: d
5 Place is often confused as relating to location. In marketing-mix terms, it is about the channels of
distribution that a firm uses.
Correct answer: a
6 Selling directly to the consumer means that the manufacturer will have to store, stock and pay
for the associated costs. Where intermediaries are used, then some of the cost for stockholding
passes to the intermediary.
Correct answer: c
7 Viral marketing is a recent development in marketing and involves the use of marketing
techniques that make use of social networks. The aim is for a marketing message to be spread,
rather like a virus, from person to person. Examples of viral promotions include the use of
video clips and text messages. The film Cloverfield made much use of viral marketing to create
interest in its release.
Correct answer: a
PLACE - Distribution
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This P makes products available to customers where and
when they want them
Up 20% of production costs can be taken up with freight
charges
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Moving raw materials to the producer
Transporting finished goods
The distribution channel is the means by which the
organisation and the customer are brought together at a
certain place and time to buy and sell goods
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In a shop
On the internet
TV shopping
Organisation to Customer and what
goes in between…
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Manufacturers – make the product
Wholesalers – stores in bulk to sell to retailers
Retailers – sell to the end customers
Channels:
A
– Manufacturer – consumer
 B – Manufacturer – company warehouse - company
shops – customer
 C – Manufacturer – wholesaler – retailer – customer
 D – Manufacturer – retailer – customer
 E – Manufacturer – E-tailers
CASESTUDY
Distribution can be expensive internationally: the longer the supply
chain, greater the cost. Coca-Cola’s 4th biggest market is China,
one day, possibly the largest.
In the 1970’s China had one brand of soft drink, distributed nationally. It was
difficult for foreign companies to enter the market. Coca-Cola started by exporting
to China and selling in retail outlets such as hotels. Over time, they developed a
relationship with the Chinese government. Bottling plants were set up that were
owned by the government. The next stage was to set up a joint venture bottling
plant, owned by Coca-Cola and the government. Eventually, Coca-Cola was
allowed its own bottling plants. This way the company could produce cheaply and
use local supplies or raw materials. By 2008 Coca-Cola had 40 bottling plants in
the country. It now produces tea, coffee and bottled water, as well as Coca-Cola
itself and many other soda drinks.
1. Why would Coca-Cola want to set up a bottling plant in China rather than
export bottles of Coca-Cola to China?
2. Illustrate how the supply chain was shortened when Coca-Cola set up its
own bottling plants in China
Mark, Jo, Danny, Simon, Pierre, Hailey, Nadine & Mel