Promotional Decisions 3
Business: BTEC Level 3 National Extended Diploma, topic 2.1.10
Promotional Mix
The promotional mix is the combination of different promotional methods that a business uses. For example, a business 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 businesses will have much more finance (money) available to spend on promotions.
- Some promotional methods (e.g. TV advertising) are more expensive than others.
- Smaller businesses 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 businesses 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 business' 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 business 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.
Test yourself on Promotional Decisions 3
What are the factors influencing the promotional mix?
Which product requires a large amount of information to be given to consumers in promotion?
What are the 4 main reasons why businesses use promotion?
Adverts for the iPhone X show the new 'Animoji' feature which allows you to animate an emoji to match your facial movements. Why is this used in promotion?
Why do businesses use promotion?