IGCSE Business Studies Ch 15: Marketing Mix: Promotion

Cambridge IGCSE Business Studies

Chapter 15: The Marketing Mix – Promotion

Promotion is the part of the marketing mix used to raise customer awareness, generate sales and help create brand loyalty. This chapter explains advertising, sales promotion, target audiences, media choice, product placement, public relations, budgets and cost effectiveness.

PromotionAdvertisingTarget audienceAdvertising mediaSales promotionProduct placementPublic relationsPromotion choice

Topic 1: Promotion Basics

Promotion communicates with customers to inform, persuade and build loyalty.

1. Promotion

Promotion refers to marketing activities used to raise customer awareness of a product or brand, generate sales and help create brand loyalty.

Promotion gives customers information about:

the product
its price
where it is available, which is place.

Promotion is therefore an important part of the marketing mix.

2. Main Types of Promotion

Advertising

Paid communication with potential customers to encourage them to buy a product.

Examples

television
internet and social media
newspapers
magazines
radio
billboards.

Sales Promotion

Short-term incentives or special offers designed to increase sales.

Examples

discounts
free samples
BOGOF
competitions.

3. Aims of Promotion

Businesses use promotion to:

Introduce a new product: Customers need to know that the product exists.
Increase sales: Promotion may persuade more customers to buy.
Compete with competitors: Advertising can encourage consumers to choose one business's product instead of another.
Create or improve a brand image: Promotion can create a particular image for a product.
Improve the company's image: Promotion and public relations can create a positive view of the whole business.

Topic 2: Advertising

Advertising can inform customers or persuade them to buy.

4. Advertising

Advertising is paid-for communication with potential customers about a product to encourage them to buy it.

Advertising can be:

InformativePersuasive

5. Informative Advertising

Informative advertising gives customers information about a product.

Information might include

price
features
specifications
where the product is sold.

It is particularly useful when customers need detailed information before making a decision.

Example: A laptop advertisement may explain memory, processing speed, screen size and other technical features.

6. Persuasive Advertising

Persuasive advertising tries to convince consumers that they need or want a product.

It often focuses on

image
lifestyle
attractiveness
emotions.

For example, perfume advertising may focus more on how attractive or fashionable the customer will feel than on technical information about the product.

Easy difference: Informative → tells customers about the product. Persuasive → convinces customers to buy the product.

Advertising process and difference between informative and persuasive advertising

7. The Advertising Process

A business normally follows five main steps:

Set advertising objectives
Decide the advertising budget
Create the advertising campaign
Select the advertising media
Evaluate the effectiveness of the campaign

8. Target Audience

The target audience is the group of people who are potential buyers of a product or service.

The target audience is important when choosing advertising media.

Example: A business selling mountain bikes might advertise in cycling magazines, specialist websites and relevant social media.

Advertising on expensive national television may reach many people who are not potential customers.

9. Main Advertising Media

Students should know the main methods and be able to choose an appropriate one.

Television

Advantages

Reaches a very large audience.
Can show the product attractively using sound and images.

Disadvantage

Very expensive.

Suitable for

Mass-market products such as food, drinks and household products.

10. Newspapers and Magazines

Newspapers

Useful for local businesses, national products and providing detailed information.

Local newspaper advertising can be relatively inexpensive.

Magazines

Particularly useful for targeting a specific group.

Examples

golf equipment → golf magazine
perfume → fashion or women's magazine
specialist equipment → professional journal.

The main advantage is that the business can advertise directly to people likely to be interested in the product.

11. Posters and Billboards

Advantages

Relatively inexpensive.
Seen repeatedly by people passing the location.

Limitations

Little detailed information can be included.
People may pass without noticing them.

They can be useful for local events and mass-market consumer products.

12. Internet and Social Media

Online advertising can reach large numbers of people locally and internationally.

Advantages

Large amounts of information can be provided.
Customers may be able to order immediately.
Online advertising can be relatively inexpensive.

Limitations

There is a lot of online competition.
Customers may not see the business's website or advertisement.

Internet and social media can be especially effective when the target market includes younger consumers.

Topic 3: Sales Promotion and Wider Promotion

Sales promotion, product placement and public relations are also important promotional tools.

13. Sales Promotion

Sales promotions are incentives, special offers or deals aimed at consumers to achieve a short-term increase in sales.

Sales promotion normally supports advertising rather than replacing it.

14. Main Methods of Sales Promotion

Students should know these important methods.

1. Price Reductions

A business temporarily lowers its price.

Examples

sales
money-off coupons
short-term discounts.

These may encourage customers to try the product, buy more and return in the future.

2. BOGOF

BOGOF = Buy One, Get One Free.

It encourages customers to buy larger quantities.

3. Free Samples

Customers receive a small amount of the product for free.

Common examples

food
shampoo
cleaning products.

The aim is to encourage customers to try the product and then buy it.

4. Point-of-Sale Displays and Demonstrations

Point of sale means the place where the product is sold.

A business may create a special display or demonstrate how the product works. This can attract attention and encourage customers to buy.

5. After-Sales Service

After-sales service provides help after a customer buys the product.

Examples

repairs
customer support.

It is particularly important for expensive products such as cars and computers. Customers may choose a business because they know help will be available if something goes wrong.

Sales promotion methods including price reductions, BOGOF, samples and after-sales service

15. Benefits of Sales Promotion

Sales promotion can:

encourage customers to try a new product
attract customers from competitors
increase sales during periods of low demand
encourage existing customers to buy more
help develop customer loyalty.

16. Product Placement

Product placement occurs when branded products appear in television programmes, films and music videos.

The product becomes associated with the image of the programme or film.

Example: Expensive cars appearing in action films may be associated with excitement, speed and status.

However, product placement can be expensive.

17. Public Relations and Sponsorship

Public relations (PR) aims to create a positive image of the business and its products.

Methods include

sponsoring sporting events
supporting charities
donating products
organising publicity events.

A positive company image may make customers more likely to choose its products rather than competitors' products.

Topic 4: Choosing Promotion Methods

The best promotion method depends on budget, target market, product type and the situation.

18. Marketing Budget

A marketing budget is a financial plan showing how much money is available to market a product or product range over a particular period.

The size of the budget affects the promotional methods available.

Example: A small business may not be able to afford television advertising and may instead use social media, leaflets and local advertising.

19. Cost Effectiveness of Promotion

Businesses should not simply choose the most expensive advertising method.

Promotion should be cost effective: Cost of promotion → Increase in sales achieved

Spending a large amount on advertising is not worthwhile if sales increase only slightly.

Important exam point: Advertising may increase sales, but this does not automatically mean that profit increases. The advertising itself costs money.

20. Choosing the Most Appropriate Promotion Method

There is no single best method of promotion.

The business should consider:

Marketing budget: Can the business afford the method?
Target market: Who are the customers and which media are they most likely to see?
Type of product: A producer good may require informative promotion, whereas consumer products may use persuasive advertising and sales promotions.
Stage of the product life cycle: A newly launched product may need informative advertising, while an established product may use more persuasive advertising.
Culture and country: Promotion must be appropriate for the culture and advertising media available in the country.

Factors affecting the choice of promotion method

21. Examples of Suitable Promotion

Situation	Suitable Promotion
New food product	Free samples + advertising
Luxury perfume	Persuasive advertising in suitable magazines/social media
Technical machinery	Informative advertising/direct sales
New local restaurant	Local advertising/social media
Established product with falling sales	Price reduction or other sales promotion
Product aimed at young consumers	Social media
Expensive computer	Informative advertising + after-sales service

Key Definitions

Term	Meaning
Promotion	Marketing activities used to raise awareness, generate sales and create brand loyalty
Advertising	Paid communication with potential customers to encourage purchase
Informative advertising	Advertising mainly providing information about a product
Persuasive advertising	Advertising designed to convince consumers to buy
Target audience	Potential buyers at whom promotion is aimed
Sales promotion	Short-term incentives used to increase sales
Marketing budget	Financial plan showing how much can be spent marketing a product
Product placement	Branded products appearing in films, programmes or other media
Public relations	Activities aimed at creating a positive image of a business

What Students Must Know for the Examination

Students should be able to:

explain the main aims of promotion
distinguish between advertising and sales promotion
distinguish between informative and persuasive advertising
explain why the target audience is important
choose suitable advertising media for different products
explain important methods of sales promotion
explain briefly product placement and public relations
explain the importance of the marketing budget
explain why promotion should be cost effective
recommend and justify an appropriate promotional method for a particular business or product.

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