IB BUSINESS & MANAGEMENT A COURSE COMPANION (2009) P217-219 4.2 MARKETING – PROMOTION IB BUSINESS & MANAGEMENT A COURSE COMPANION (2009) P217-219

PROMOTION Promotional activity is categorized into two types: “above the line” & “below the line” Above the Line This is direct advertising through consumer channels, where the control of the process is passed to third parties. (eg: TV, cinema, newspaper, magazine, the Internet and radio) Below the Line All other forms of promotional activity fall into the below-the-line category and remain in the direct control of the business.

Above the Line-Advertising Advertising comes in many forms and can vary greatly in expense. Advertising tends to be two types: Persuasive Informative.

ABOVE THE LINE ADVERTISING Persuasive Advertising This advertising is aimed to convince consumers to buy a particular product. It is the most effective form of advertising, but it can be controversial, particularly if targeted at children.

ABOVE THE LINE ADVERTISING Informative Advertising Informative advertising aims to make consumers aware of the key features and characteristics of a product to enable them to decide for themselves which product to buy.

ABOVE THE LINE ADVERTISING What type of advertising? What type of advertising and where to do it will depend greatly on the individual product being sold. It makes sense to target advertising towards you key consumer groups, hence the number of beer advertisements at half-time of football matches. Specific products may be require specific channels to be most effective.

BELOW THE LINE ADVERTISING Price Promotions This could be in the form of discounts on the selling price, for example 50% off, or offering more for your money, for example “BOGOF”, The aim is to increase sales of product, particularly to new customers who may then buy the product again in the future.

BELOW THE LINE ADVERTISING Direct Marketing & Direct Selling Mail to your door or email box are common examples of this. Direct mailing is successful used by local restaurants, (especially take-away). Direct selling takes this one stage further. Eg: cold-calling arranged by insurance companies Technology also now allows for `robo-calling` where a computer continually dials numbers and plays a message when the call is answered. However, businesses must be careful of the reputational risk, as cold calling and email spam can put consumers off a particular brand or product.

BELOW THE LINE ADVERTISING Loyalty Cards & Regular Purchase Discounts Many supermarkets now offer loyalty cards or programs allowing consumers to collect points on their shopping that can be redeemed against future purchases. Apart from encouraging customers to remain loyal, it also allows businesses to create a useful database of buying habits which can be used to target direct mailing or even be sold on to other businesses.

BELOW THE LINE ADVERTISING Point of Sale Displays Many products are arranged in attractive displays to draw customers attention to them. This will make consumers more likely to pick the product up and it is often used for products that are impulse buys, such as sweets, drinks and snacks.

BELOW THE LINE ADVERTISING Public Relations (PR) Companies try to create brand awareness and positive image association by activities such as sponsorship. Example: Red Bull, the energy drink company sponsors activities such as Red Bull Flugtag for crazy flying inventions (based on its slogan “Red Bull gives you wings”)

PROMOTIONAL MIX Business needs to consider the following: Who is the product aimed at – should I target the whole market or smaller segments? How much will it cost – do I have the finance available for all the types of promotional activity I would like to use? Howe effective will my promotion be – am I sure that I will get a return from my investment?

PROMOTIONAL MIX In general businesses will adopt a number of different methods of promotion for any given product in order to get a good balance between effectiveness and cost. The combination of these activities is known as the promotional mix and businesses will be continually tweaking this mix to try to attract as many consumers as possible to their products.