BTEC Enterprise Component 3 - Marketing and Finance

What is Promotion

Any method of communication that tries to encourage current and potential customers to buy products.

Purpose of Promotion

To either create a positive image of the enterprise on the minds of current and potential customers

Or to encourage current and potential customers to buy products

What promotions include

Who they are, What they sell, Why they’re the best, The brand image, Cost

Promotional methods

TV, Press, Radio, Cinema, Posters

The promotional Mix

Enterprises choose a combination of promotional methods depending on their products and their target audience

Elements of the promotional Mix

Direct Marketing, Advertising, Public Relations, Sales Promotion, Personal Selling

The Message

What the enterprise wants to get across to it’s customers

Benefits of a Promotion

Informs, reminds and persuades customers

The Medium

How you get your message across to your target audience.

Purpose of promoting an Enterprise

To create positive associations with it and persuade customers to take an interest in it.

Factors affecting the choice of promotional method to use

Budget constraints, Appropriateness, Impact of sales, Target market.

BOGOF

Buy one Get one Free, where customers get a free product when one item is purchased.

Money off/discounts

A business gives customers a discounted price - for example a percent off the original price

Loyalty Schemes

Customers building up points that have a monetary value. This can be used for goods or discounts on future purposes

Free samples

Customers can try something out for free before buying it

Advantages of competitions

It might encourage customers to buy a product to get the chance to win a prize

Disadvantages of coupons

Customers may not regularly go to the business andd therefore it will have no impact (might be a product you dont buy regularly)

Advantage of loyalty cards

Customers may return to gain stamps/points which can be used against future purchases

Disadvantage of loyalty cards

Customers may feel pressured to make more purchases to earn rewards, leading to overspending

Advantage of money off coupons

Customers may be incentivized to try or purchase products they would not usually buy, leading to an increase in sales

Disadvantage of money off coupons

Customers may become reliant on discounts and may not purchase items at full price, impacting overall profitability

Advertising

Widely used by enterprises that wish to make more customers aware of the products that they offer

Digital Advertising

Done online or using a device such as a mobile phone

Purpose of Advertising

To inform people and persuade people into making a purchase

Print Advertising

In newspapers and magazines, or on billboards

Video Advertising

On television in a cinema or posted on a video streaming site like youtube

Ambient Advertising

Public places such as the sides of buses

Digital Advertising

Websites, or sent to customers via text messages or e-mail

Audio Advertising

Radio Adverts, and adverts on music streaming platforms such as spotify

Why video advertisements are used

They are suitable for goods that have several different features or moving parts because the video can show demonstration of the goods being used

Why print advertisements are used

They are generally seen by large amounts of people, and large eye-catching billboards can bee placed besides busy roads especially during rush hour

Why ambient advertisements are used

They can be effective at catching the attention of potential customers who are passing by or waiting.

Why digital advertisements are used

They reach large numbers of people very quickly and many big companies have made it even easier for the regular online user to see advertisements.

Why audio advertisements are used

They allow enterprises to talk to customers about their products. For a low cost, an enterprise can tell people about the features of their product and where it can be bought.

Advantage of video advertising

They can usually be seen by a very large audience

Advantage of print advertising

It could be taken by a potential customer and the information can be referred back to

Advantage of ambient advertising

It can be seen by a wide number of people in a chosen area

Advantage of digital advertising

These adverts can very easily be posted to digital media and targeted to specific people

Advantage of audio advertising

Can be targeted at a specific area of type of audience based on listening choices and habits

Disadvantage of video advertising

It can be very costly, and therefore might not be suitable for smaller businesses

Disadvantage of print advertising

Sometimes adverts can be ignored by potential customers

Disadvantage of ambient advertising

Sometimes these adverts might not be seen by the potential customers you are targeting

Disadvantage of digital advertising

Certain websites can prove very expensive to advertise on, especially popular sites

Disadvantage of audio advertising

The advert cannot be referred back to as it was only heard live

B2B (Business to Business)

A market in which one company sells products to another company

Purpose of sales promotions

Gives customers an incentive to buy an enterprises products

Benefits of free samples

Having tried the product, customers may want to buy it in order to try it again

Drawbacks of BOGOF

It impacts the profits negatively if too few sales are generated

Product Life Cycle

Introduction, Growth, Maturity and Decline

When to do a sales promotion during the the product life cycle

They are most effective if done during the introduction and growth phases