What promotion is for
Definition
Promotion: the part of the marketing mix that covers every way a business communicates with customers about a product.
- There are four reasons a business promotes: to inform or remind customers about the product, to persuade them to buy it, to create or change its image, and to create or increase sales.
- The reason comes first and the method follows, because the aim decides whether the business needs an advert, an offer, a press release or a sponsorship.
Common Mistake
- Promotion does not mean only a discount or a special offer, and it is not another word for advertising.
- Advertising and sales promotion are two of the methods promotion uses, and the earlier guides in this chapter cover them.
To inform and remind customers
- Nobody buys a product they have never heard of, so a new product or a new shop needs promotion that carries the facts: what it is, what it costs, where to get it and when it opens.
- Informing also covers changes to something customers already know, such as a new recipe, a new size, longer opening hours or a move to a different site.
- Reminding keeps an established product in mind. Customers drift towards whatever brand they have seen most recently, so a business that stops promoting slowly disappears from the shopping list even though nothing about the product has changed.
Example
- A new Aldi store leaflets the surrounding streets with its opening date, address and a list of prices, which is promotion to inform.
- Warburtons already sells bread in almost every supermarket, so its adverts tell shoppers nothing new and exist purely to remind them of the name at the bread shelf.
To persuade customers to buy
- Persuading means giving customers a reason to choose this product rather than a rival's, such as a lower price, better quality, faster delivery or a longer guarantee.
- This is why so much promotion makes a direct comparison. Aldi's adverts set its prices against Tesco's, and broadband providers advertise their speeds against each other, because the customer is choosing between them rather than deciding whether to buy at all.
- Persuasion matters most where the products are similar and switching is easy, such as insurance, mobile contracts and current accounts, because the message is almost the only thing separating one supplier from the next.
Example
- Monzo promotes how quickly an account can be opened on a phone, because it is persuading customers to leave a bank they are already with.
- Currys promotes a price promise for the same reason: the television is available elsewhere, so the promotion has to remove the reason to shop around.
To create or change the image of the product
- A product's image is what customers assume about it before they buy, and promotion shapes that image through the words, pictures, people and events the business attaches to it.
- A business creates an image at launch and changes it later when it wants different customers, when it moves upmarket or downmarket, or when it has to recover from bad publicity.
- Image work is slow and it uses different methods from a sales push, because public relations and sponsorship change what customers believe while a discount only changes what they pay.
Example
- Greggs was seen for years as a cheap bakery, and its playful social media voice and vegan launches turned it into a brand younger customers follow and talk about.
- The prices barely moved, so the change came from the promotion rather than from the product itself.
To create or increase sales
- The other three reasons all end here, because informing, persuading and building an image are worth paying for only if more customers buy.
- Selling more units raises revenue directly, so a business can put a figure on what a campaign has done for it.
Example
- A café sells 200 coffees a week at £3, then leaflets the nearby offices and sells 240 a week.
- The promotion brought in £120 more revenue a week, so the owner should keep leafleting only if the leaflets and the extra milk, cups and coffee cost less than that.
- Promotion that raises sales by less than it costs makes the business worse off, which is why the extra revenue always has to be set against the cost of the campaign.
- Promotion is also used to defend sales rather than grow them, so a business facing a new rival promotes to hold on to the customers and the market share it already has.
Matching the reason to the situation
- A brand-new product needs promotion that informs, and a long-established one needs promotion that reminds, which is why two businesses in the same market can run completely different campaigns.
- A business losing customers to a rival promotes to persuade, and one entering a new segment or recovering from bad publicity promotes to change its image.
Exam technique
- When the question asks why this business promotes its products, name the reason precisely rather than writing "to increase sales" every time.
- To explain the effect, follow the chain: promotion raises awareness, awareness brings more customers, and more customers raise revenue.
- The mistake to avoid is treating image and sales as the same aim, since a business can sell more this month while damaging how customers see it.
Self review
- What are the four reasons a business promotes a product?
- What is the difference between promoting to inform and promoting to remind?
- Why does a well-known product still need promotion?
- Give one reason a business might want to change the image of a product.
- State the formula linking revenue to price and quantity sold, and explain why it matters to promotion.
