Promotional Mix

Promotional mix is the combination of different promotional methods that a business uses. For example, a firm might advertise largely through TV, but also do some social media advertising and have sponsorship deals in place with athletes. Factors influencing the promotional mix are:

Finance available

Some firms will have much more finance (money) available to spend on promotions.
Some promotional methods (e.g. TV advertising) are more expensive than others.
Smaller firms with less finance are less likely to be able to afford TV advertising.

Competitor actions

The promotional mix of competitors might influence a business because they may want to reach consumers using the same channel as rivals.

The nature of the product or service

The type of product (or service) will influence which promotional method needs to be used.
A technical product like a laptop may want to give consumers more information about their product, whilst a simple product like orange juice (Tropicana juice for example) may not need to give info.
A fashion label like Hugo Boss does not have much information to communicate. How their products look is more important.

The nature of the market

As a market matures, the rate of growth changes.
- If a market is growing slowly, advertising may be less important.
- If a market is growing fast, then firms will be battling for market share and are willing to spend more on advertising as it will affect sales by a larger amount.

Target market

A firm’s target market for a product (or service) will affect the promotional method that they use because different types of people use different platforms more often.
A business wants to promote its product to its potential customers.
A firm that produces women’s underwear will not usually want to promote their product to middle aged men.

Reasons for Promotion

There are 4 main reasons why businesses use promotion:

To inform/remind customers about the product

A business cannot sell a product (or service) if no consumers know about it.
Businesses must be able to inform their target market about their product (or service) and remind people, at the right time, in the hope that they will buy it.
Reminding customers at the right time is key. There is not much point in promoting Christmas baubles on the 26th December.

To create or increase sales

Informing consumers that are not aware of a business’ products can ‘create’ new sales.
By constantly reminding existing customers about a product (or service) and its benefits, businesses can increase the sales from each customer.
This is more likely to happen during the periods before short “sales windows” like Easter and Christmas.

To create or change the image of a product (or service)

A promotion can have a large impact on how customers see a product. If a celebrity uses the product, a business can give the product a fun, luxury or innovative image.
UnderArmour sponsored golfers like Jordan Spieth to create a youthful and cool image after they launched their golf and sporting wear ranges.
A promotion can help to change customers’ perception of a product.

To persuade customers to buy the product

Promotions are often used to advertise the benefits of using a product and to explain why you should buy it.
These are attempts to persuade the customer that this is the best product for them.

1Business Activity & Influences on Business

1.1Business Objectives

1.1.1Business Aims

1.1.2Business Objectives

1.1.3Business Objectives Change Over Time

1.1.4End of Topic Test - Business Aims

1.1.5Diagnostic Misconceptions - Profit

1.2Types of Organisations

1.2.1Sole Traders & Partnerships

1.2.2Limited Companies

1.2.3Limited Liability

1.2.4Unlimited vs Limited Liability

1.2.5Not For Profit & Franchises

1.2.6Multinational Companies

1.2.7End of Topic Test - Business Ownership

1.2.8Application Questions - Business Ownership

1.2.9Diagnostic Misconceptions - Company vs Business

1.2.10Diagnostic Misconceptions - Owners vs Shareholders

1.3Classification of Businesses

1.3.1Sectors

1.4Decisions on Location

1.4.1Location

1.5Business & the International Economy

1.5.1Globalisation

1.5.2Exchange Rates

1.6Government Objectives & Policy

1.6.1Government Objectives

1.6.2The Government & Business Activity

1.6.3Interest Rates

1.6.4Interest Rates - Calculations

1.6.5Diagnostic Misconceptions - Recessions

1.7External Factors

1.7.1External Factors

1.8What Makes a Business Successful?

1.8.1Measuring Success

1.8.2Reasons for Failure

2People in Business

2.1Internal & External Communication

2.1.1Communication

2.2Recruitment & Selection Process

2.2.1Types of Employment

2.2.2Recruitment Stages

2.2.3Effective Recruitment

2.2.4Legal Controls Over Employment

2.2.5Diagnostic Misconceptions - Internal Recruitment

2.3Training

2.3.1Training

2.4Motivation & Rewards

2.4.1Motivation in the Workplace

2.4.2Financial & Non-Financial Methods

2.4.3End of Topic Test - The Workforce

2.4.4Application Questions - The Workforce

2.4.5Diagnostic Misconceptions - Money

2.5Organisation Structures

2.5.1Organisational Structures

2.5.2Centralised vs. Decentralised Structures

2.5.3Tall & Flat Organisations

2.5.4Functional Areas Within a Business

2.5.5End of Topic Test - Org Structure

3Business Finance

3.1Sources of Finance

3.1.1Internal & External Sources of Finance

3.1.2Factors Affecting Sources of Finance

3.2Cash Flow Forecasting

3.2.1Cash Flow

3.2.2Consequences of Cash Flow Problems

3.2.3Cash Flow - Calculations

3.2.4Solutions to Cash Flow Problems

3.2.5Diagnostic Misconceptions - Cash Flow

3.3Cost & Break-Even Analysis

3.3.1Costs, Revenue & Profit

3.3.2Profit, Average Unit Cost & Interest

3.3.3Costs - Calculations

3.3.4Revenue - Calculations

3.3.5Break-Even Analysis

3.3.6Profit & Losses - Calculations

3.3.7End of Topic Test - Finance

3.3.8Grade 9 - Finance

3.3.9Diagnostic Misconceptions - Fixed Costs

3.3.10Diagnostic Misconceptions - Break-even

3.4Financial Documents

3.4.1Financial Statements

3.4.2Income Statement

3.4.3Understanding Business Performance

3.5Account Analysis

3.5.1Business Calculations

3.5.2Gross Profit - Calculations

3.5.3Net Profit - Calculations

3.5.4Business Calculations 2

3.5.5Business Calculations 3

3.5.6Liquidity

4Marketing

4.1Market Research

4.1.1Market Research

4.1.2Forms of Market Research

4.2The Market

4.2.1Customer Needs

4.2.2Satisfying Customer Needs

4.2.3Market

4.2.4The Competitive Environment

4.2.5Market Segmentation

4.2.6Market Mapping - Price vs Quality

4.2.7End of Topic Test - Marketing

4.2.8Application Questions - Marketing

4.2.9Diagnostic Misconceptions - Competition

4.3The Marketing Mix

5Business Operations

5.1Economies & Diseconomies of Scale

5.1.1Economies of Scale

5.1.2Diagnostic Misconceptions - Economies of Scale

5.2Production

5.2.1Production Processes

5.2.2Flow and Batch Production

5.2.3Production Efficiency

5.2.4Technology & Production

5.2.5Diagnostic Misconceptions - JIT vs JIC

5.3Factors of Production

5.3.1Factors of Production

5.4Quality

5.4.1Importance of Quality

5.4.2Identifying Quality

5.4.3Total Quality Management

5.4.4End of Topic Test - Operational Decisions

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