Advertising Promotion Business - Assignment

APB
Advertising & Promotions in Business
By _____________________________
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Table of Content
INTRODUCTION ……………..………………………….
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TASK 1
1.1 ……………………...
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1.2 ……………………...
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1.3 ……………………...
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1.4 ……………………...
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TASK 2
2.1 ……………………...
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2.2 ……………………...
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2.4 ……………………...
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TASK 3
3.1 ……………………...
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3.2 ……………………...
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TASK 4
4.1 ……………………...
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4.2 ……………………...
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4.3 ……………………...
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4.4 ……………………...
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.……………………………..….……..……...
…………………….….REFERENCE ………..
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INTRODUCTION
To reach a desired goal, business ventures in this contemporary days need to put to use
effective advertising and rigorous promotion of their product or services. By advertising,
information about the product or service is propagated or circulated to chosen customers or
anticipated participants, while promotion which perfects advertising and is short-lived,
increases customer knowledge or consciousness of product or service, distinguish a product
or service and raise demand which is long lasting.
This work is being written for the purpose of education us about the importance and
effectiveness of advertising and promotion in business. It will enlighten learners on the effect
of advertising and promotion, its methods and planning, in marketing their business’ product
or service to the expected customers.
TASK 1 1.1
MARKETING COMMUNICATION APPLIED TO ADVERTISING AND
PROMOTION
Communication is the process of dissemination of information, ideas and views from one
person to another through a preferred medium. This unit is aimed at exploring the application
of marketing communication to establish and maintain products/brands/services. This is done
by using the knowledge of how communication works, the establishments involved in the
procedure, practical procedure needed to attain them.
Communication process analysis:
 First step is to identify the aim of marketing communication which majorly includes to
inform, to persuade, and to remind. To accomplish this one needs to
1. Create knowledge of the trade name of the business
2. Define the desires or need that will be met by the product /service.
3. And finally, inspiring targeted customers to get the product or utilize the
service.
 Secondly, applying the models of communication in advertising and promotion which
helps marketers to understand how communication works.
Communication models
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There are two basic models of communication, and they include: AIDA and Communication
mix.
1. AIDA: this is an acronym for A- Attention, I- Interest, D- Desire, A- Action.
 Attention: in advertising there is need to grab to the attention of the intended customers.
As we live in a world filled with media, there is need to fast and direct in grabbing
viewer's attention. This can be done by using images, size, celebrity, model, colour,
layout, typography. Using attractive words, or pictures that grabs the reader's eye and
attention, this create a curiosity for what next you have to say.
 Interest: once the attention of the intended customer is taken hold of, a new step that hold
the interest of the customer is taken. Creating interest in the mind of the viewers or
intended customers is absolutely essential and takes a more advance process, it focuses on
the need of viewers, this can be done by using attractive or mind/eye pleasing sub-
headings, by doing this viewers tend to read and find out more about the advertised
product.
 Desire: creating desire for the product or service the brand is offering is also necessary.
The component of desire is created by using body copy which has to do with writing on
why buying the brand is essential in detail by expatiating on the characteristics of the
brand, some facts and figures.
Interest and desire usually go hand-in-hand, as the interest is created, at the same time
desire is also created by assisting them to have an understanding of the product/services
being offered, and appealing to their individual wants and needs.
 Action: here the viewer makes a decision to take an action towards purchasing the product
or patronising the service. Information as to how to contact will be given either in the
form of address of shop or office, website address, phone numbers, toll free numbers.
There is need to be specific on what action you desire viewers to take.
For example: "Visit www.mindtools.com now for more information". Or call: 477 236.....
For further enquiries.
2. Communication mix: communication mix relates to promotion of brand/product/service to
intended customers by adopting some strategic methods. It is also referred to as Promotional
Mix. It is a powerful tool in marketing as it not only create awareness about the
product/service but is also persuasive toward patronising it. There are six elements of
communication mix and they are;
 Advertising: this is the most common and outstanding element of communication mix, it
comprises of all information paid to be disseminated through several medium to an intended
audience. Medium used could be television or radio station, print publication or website.
Advertising influences the mind of the people towards seeing the product/service as a must-
acquire. It is non-personal and could be Broadcast, Print, Internet, Outdoor. It enables a
company to draw in new customers and as well retain the pre-existing customers.
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Advertising can be in three different forms namely:
Consumer Advertising
Business-to Business Advertising
Product and Promotional Advertising
 Personal Selling: this has to do with using a salesperson who moves from place to place to
personally represent the company and present, persuade customers to buy/use their services
and also establish a good customer relationships. Personal selling can be done through:
Sales promotion
Trade shows
Incentive programs
 Sales promotions: sales promotion is using short-term incentives such as free samples,
displays, demonstrations, discount coupons, or multi-buy offers such as "buy one, get one for
free," to increase income and cash flow, acquire new customer Promotions are most times
also done using paid communication, which offers ads to promote the short-term incentive
adopted.
 Public Relations: public relations and advertising are similar as it also entails passing
information about the brand product/service through mass media, but they differ in other
aspects. It is also known as PR. It differs in that information communicated is not paid for,
the information therefore sometimes cannot be controlled though an attempt can be made to
influence the information by press releases. Here, a good and mutual dealing is established
with the organisation’s respective publics by procuring a good publicity and these can be
done through:
Press releases
Sponsorships
Special events
Web pages
 Direct Marketing: this combines parts of personal selling and sales promotion. It is carried
out using E-mails, telephones, internet and direct mails to disperse message to carefully
selected customers, the message containing information such as special offers, new product
launches, promos and its deadline etc. The communication between the company and
customer is often interactive, as the message passed from the company to the customer
usually seek or require a reply from the targeted customers. Some example of direct
marketing communication are Informercials, Mail-order clubs, Online or print surveys. It can
be done through the use of either Catalog, Telemarketing, Kiosks.
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1.2 THE STRUCTURE OF THE ADVERTISING AND PROMOTION
INDUSTRY
This describes the manner in which the advertising industry is organized and its components.
Hierarchically, the industry is grouped into the following; the advertisers-advertising and
promoting agencies-external facilitators-media organization-target audience.
 Advertisers: advertisers in an advertising and promoting industry pioneer advertising in
marketing. Their purpose is to ensure that Information, view and ideas about their
company, its product/services must be successfully disseminated to all expected or
intended audience. They therefore usually have an account that is connected with
advertising agencies.
Example; leading Global advertisers, source: Adbrands.net: top global advertisers.
Procter&Gamble, Unilever, L’Oreal, Toyota, Nestles, McDonald, Coca cola, Volkswagen,
Mars Inc., Sony.
 Advertising and promoting agencies: according to Wikipedia,” advertising agency is a
service based business dedicated to creating, planning, and handling advertising for its
clients”. They are involved in full-service, and can be interactive and made up of media
specialists.
Their agencies are separate from client’s business and give ideas that will enhance sale
and patronage of the client’s product/services.
Example: the five largest agencies are WPP group; London, Omnicom group; New
York, Publicis Groupe; New York, and Dentsu; Tokyo.
Promotion agencies: these agencies complement the advertising agencies, they perform
activities such as data base/direct marketing, sale promotion, E-commerce, event
planning,
 External facilitators: these are external bodies that get advertising contract jobs from the
advertising and promotional agencies. They are usually independent and neutral, they
retain the agenda, keep confidentiality, and are efficient in negotiation.
They can be grouped into three and these are:
Consultants: it involves creativity, media and database.
Production facilitators
Software firms- these involve web tracking and fulfilment.
 Media organization: this refers to persons or an organization involve in passing
information to the general public through newspapers, magazine, radio, television, direct
mails, interactive broadcast, internet, ipod, mobile phones and any other means of mass
communication.
It is group into 5 categories:
Broadcast: Tv, radio,
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Print: magazines, direct mails, newspaper, specialty,
Interactive media: Internet, Interactive broadcast.
Support media: outdoor, directories, sponsorship, point-of-purchase, branded
entertainment,
Media conglomerates: Time warner, Disney, turner.
 Target audience: this is the specific group of people, identified as the intended receiver of
an information. This group of people can also be called Target population. Target
audience could be house hold consumers, businesses, professionals, government
organisations.
1.3 REGULATION OF PROMOTION ACTIVITIES IN UK
Promotion of sale of product/service in business is an indispensable marketing drive in an
ever increasing competitive market system. It could be done by free offers, gifts, discount,
prize draws and competition, bonanza, instant wins and scratch cards, loyalty schemes etc.
Sales of Act 1997: This requires that all product/services must be rightly described, be of
required quality and fulfil the purpose for which it was produced. The product must contain
exactly what it has being describe to contain, it must suit the purpose it is meant for and It
must also be the same with sample. If any of these condition is found wanting the customer is
permitted to return and request for refund.
Checks in sales of act are: title, suit purpose, sale by sample, equivalent to description, good
enough quality.
The supply of goods and service act. 1982
This act ensures that customer who have demanded for product/services get their goods
delivered to them. Service range from, repair job, work done by solicitors, estate agents, and
so on. Services can be offered alone: dry cleaning, entertainment, work done by professionals
etc. Services can also be offered along with goods: repair and replacement, building and
decoration etc.
Consumer credit act 1974
This is act regulates agreement between the customer credit and hire. It includes personal
loan, hire purchase agreements, credit cards, and store cards,
This act see to proper agreement between the consumer and seller.
It demands the trader who uses credit facilities should acquire a Consumer credit license from
office of fair trading
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It also lays down guide to be applied where agreement is settled early or agreement is
defaulted, or ended.
The data protecting act 1998/2008.
This act controls how organisation, businesses, government use individuals' personal
information. It ensures that these information must be used:
Lawfully and unbiased
For a specified time and purpose
Moderately, rightly, with relevance
Must not be reassigned beyond European Economic area until it is well protected.
Must be kept safe and well secured.
Distance selling regulation 2000 Act: this act is no longer utilized in the UK, it is utilized on
all distance buying and selling which usually includes online shopping, mail order, phone
order or shopping through some TV channels.
Sellers in these forums must give information such as; proper description of product/service,
the price of the product/service, date and mode of delivery, cancellation right if there is,
details about the seller.
Regulation of promotion stipulate rules that will guide any form of promotion by any
company in the UK;
The UK self-regulatory system: Self-regulation plays an important and complementary role
to the legal provisions which governs advertising and marketing communication, and any
examination of the regulation of sales promotion in the UK must give due consideration to
the self-regulatory system. (Hill smith, 2003).
The regulation of promotion in UK is done through some acts like the customer protection
from unfair trading regulations. UK regulatory bodies includes;
 Office of communication (Ofcom): this body regulates communication in the UK. It is run
under some Acts of parliament most importantly the Communication Act 2003.
Their major duty is to regulate TV, radio, and video on demand sectors, fixed line
telecoms, mobiles, postal services, plus the airwaves over which wireless devices operates
by:
 Advertising standards authority (ASA): is a non-governmental organization and a self-
regulatory organization in the UK.
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Their role is to regulate the of advertisements, sales promotions and direct marketing in
the UK by investigating complaints made about ads, sales, promotions or direct
marketing and deciding whether such advertising complies with its advertising standards
codes. (About and short guide. www.asa.org.uk)
These codes stipulate that “before distributing or submitting a marketing communication
for publication, marketers, must hold documentary evidence to prove all claims, whether
direct or implied , that are capable of objective substantiation” and that “no marketing
communication should mislead, by inaccuracy, ambiguity, exaggeration, omission or
otherwise”. (asa codes, www.asa.org.uk)
 Broadcast committees of advertising practice (BCAP): This regulatory body which is
established by the Communications Act 2003, ensures abidance with laid down standard
practise in UK. It is responsible for writing and re-examination of code of broadcast
advertising in UK.
 Committees of advertising practice (CAP): This always work along with BCAP, they
write and assists in implementing advertising codes also give advice and training of
personnel in the media industry.
1.4 THE CURRENT TREND IN ADVERTISING AND PROMOTION INCLUDING
IMPACT OF ICT
Advertising trends have developed from traditional print ads, TV spots to new marketing
schemes which include More. User-Generated content, advancement in social advertising,
Make-or-Break Native advertising, Mobile device optimisation, focus on content marketing,
Micro targeting, wearing technology, In-store Mobile campaigns, increase in video
production. These new marketing schemes are developed on basis of new technology that is
fast evolving, they therefore create new and fast approach to reach out targeted customers.
Information and communication technology, in advertising helps to create audience
awareness using internet, television, and mobile phone thereby acquiring advancement over
non ICT advertising and promotional materials. More User-generated content- Acronym for this is UGC. It signifies content of any
form which includes blogs, tweets, podcasts, chats, posts, wikis, digital images and
every other kind of media which were formed by users of an internet system. It is
most appreciated for its consumer-prize authenticity, opportunity given to consumer to
have some control. It entails creativity, genuineness, view, passing along a profoundly
personal feeling that is impossible for a brand to create anew. UGC is frequently
made accessible and ready for use via the social media. It allows for conversation
between the customer and the brand and also gives new avenues for engagement by
encouraging consumers to share something about them with the brand, who
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successively shares the information with other consumers. Another reason why this
trend is important is that majority of consumers all over the world have more trust for
online products. Example: coca-cola's share a coke, this cause encourages customer to
upload their pictures with their individualized bottles Make-or-Break Native advertising: due its style, has faced various controversy.
Though it is of great benefit but it could be barred in some countries by government
regulation. Native advertising is about adding information such is new to advertising,
it is not widely accepted as many do not see the need to add advertising with
journalism. It is about adverts being the content itself.
There are seven steps to follow to use native ad and they include:
1. Create content.
2. Create an account with a DSP i.e. Demand-side platform.
3. Build your native ad
4. Select your audience segment
5. Select your payment method, dates and bid price
6. Native ad is served
7. Native ad is optimized
Native advertising creates a new medium of content dispersal for various content marketers.
It provides brands with great new methods to project their content to readers in other to get
the message across to a larger number of people. Native advertising is almost non-
interruptive.
Source: http://blog.stackadapt.com/hsfs/hubfs/Examples_of_Native_Ads_4.png?
t=1461959231443&width=568&height=218 Mobile device optimisation Focus on content marketing: this involves creating marketable content using an
extremely focused scheme. Having a focused scheme (i.e. having readers address,
know the reader's particular need and want), is what ensures an accurate aim at
specific or individual readers, instead of the general audience. It ranges from websites
to BlogSpot. It is a strategic step focused on making and spreading important, worthy
and systematic content to draw in and retain individual readers and the utmost is get an
action from the customer which is good profit. It is able to influence the behaviour of
consumers, it owns the media, rather than rent it. It is non-interruptive, educative and
odour. Advancement in social advertising: socially the world around is advancing, brands
are therefore advancing in their social advertising. Developing along with this
advancement is needed to sustain and grow a brand's image. In line with these
advancement, various social websites such as facebook, twitter, instagram etc have
also better their advertising avenue. Research has also revealed that a high percentage
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of the world's population use various social networking site many company are
therefore maximising the opportunity to advertise their brand product/services.
Example: 'In summer 2010, Twitter established its promoted Tweets and Trends; In
Autumn 2011, Facebook established its Sponsored Stories; In February 2013 Twitter
introduced ADS API (Application Programming Interface) and by April 2013,
LinkedIn and Tumblr joined their social media rivals by introducing mobile adverts to
their platforms.’
Source: http://www.google.com/url?q=http://socialmediation.com/the-advancement-in-
advertising-technology/
TASK 2 2.1
THE ROLE OF ADVERTISING FOR A BUSINESS OR PRODUCT IN INTEGRAL
PROMOTIONAL STRATEGY FOR BUSINESS
Advertising has important roles to move organization to higher levels as it the major method
of passing message to the audience.
Informative role of advertising: one of the significance of advertising is that it is
informative. This role is most important when a new product/service is launched or a pre-
existing one is updated. It provides information to the targeted customers about the company
and its product/services; the price, how it works, its features and all information about the
product basically to create awareness and demand for the new or updated product. The
information provided about the company must be compatible with the product/service as well
as complementary.
Persuasive role of advertising: another role of advertising for a business is the role of
persuasion. The targeted customer is persuaded to patronise a particular product/ service or to
switch brands,
This is one of the intense role of advertising because it can be extremely competitive due to
similarity of product/service in the market. Persuasion should therefore be able to point out
the differences and superior qualities of the product/services to give the product/services an
upper hand in the competitive market. Persuasion gives rise to increasing demand brand
product/service or company and also builds up loyalty in customers to brand.
Reminder role of Advertising: advertising also serve to remind about a pre-existing brand
product/service. This role is for the purpose of making a past or an already existing promotion
stronger by repeating information such as name of product, customer's tribute, public replies
and method of sales. Reminding retains the interest of the targeted audience and awareness.
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2.2 BRANDING AND ITS USE IN STRENGTHENING A PRODUCT OR
BUSINESS
“A brand is both, tangible and intangible, practical and symbolic, visible and invisible under
conditions that are economically viable for the company” ( Kapferer, 1986).
Branding is a powerful and sustainable high-level marketing strategy used to create or
influence a brand. It is used to generate a perception of, and thus a response in relation to, a
product or company. The power of perception (a brand) can positively influence buying
decision/s by: creating an affinity or emotional connection with the consumer, providing
justification for paying a premium price for a service or product, creating loyalty to the
product or organisation, demonstrating the quality and benefits of a service or product and
the company behind it. Acquiring more loyal customers (who are happy to pay a premium
price) is what many successful businesses strive for, and that’s what the marketing strategy
called “branding” is all about.
There are 5 elements that make up branding:
1. Brand name: brand name is referred to as the given a product/service. Its serves as a
representation of the product/service, it is also known as Product name. Examples are:
Blackberry bold 1, coke, Fanta.
2. Trade name: it is usually the name a company or a branch of an organisation is
identified with. Examples are: Puma, Toyota.
3. Brand mark: these are symbols, letters colours use to represent a brand. Example:
4. Trade mark: it could be a word, colour, symbol or even a name assigned to a particular
brand by legal authorities and cannot be used anywhere in the world by any other.
5. Trade characters: these could be animals, people animations or objects that have been
identified with a particular product by the reason of using it when advertising.
HOW BRANDING STRENGTHEN BUSINESS
According to the purpose of branding, it strengthens a business by: Giving the business an identity It distinguished the business from all others, helps distinguish the product, service, or
brand from its competitors. It influences the customers’ perspective on the business mostly in the direction one
wants. Making a concentrated effort to hammer home the message continually makes a
lasting impact It helps to address any specified audience of the business choice.
 Creating a positive perception in the minds of target customers (and staff)
 Positioning and differentiating you in relation to your competitors
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 Relating to and positively influencing customer buying decisions
 Developing, managing, and building the value of your brand
 Making it difficult for competitors to match your professionalism or positioning
 Positioning companies as employers of choice.
2.4 WAYS TO WORK WITH ADVERTISING AGENCIES
The ways of working with an advertising agency is working with clients to create and
maintain customer awareness on the product or brand and perceptive through originative and
advanced media delivery skills. The brands are more than a product or service because once
the brand is created it has a separate entity than mere products (MBA knowledge Base, 2013)
Advertising is an important partner in a company. There are thing to know for a productive
partnering;
What does the advertising agency do?
Firstly, we need to understand the role of advertising agency in business. This role is to assist
in attaining the intended goal by launching your business to the targeted audience.
What will advertising agency expect from you?
These expectation are
Open mindedness in order to be able to give needed information about product/service,
Clear minded about intended goals in the advertising campaign
How will to determine whether the campaign will work or not
This is determined by sales, survey and interview of customers in a bid to know their views.
TASK 3 3.1
THE PRIMARY TECHNIQUES OF BELOW-THE-LINE PROMOTION AND HOW
THEY ARE USED IN AN INTEGRATED PROMOTIONAL STRATEGY FOR
BUSINESS OR PRODUCTION
Below-the-line techniques
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Are advertising techniques targeted are specific set of customers, specific locations. They are
used for customer items that are purchased by customers based on the information at hand not
a researched information it is a non- media, non-advertising communication.
Below-the-line techniques use a short term motivator specifically target at customers, this
same technique is used by UNISON in developing it's million voices campaign also used by
Kia, this help to develop brand by creating awareness and then building a brand profile
(businesscasestudies.co.uk).
It uses a direct communication means to advertise to customers, it give organization control
over communication example is the placement of young girls close to specific products to
advertise to customers but target is not for large number of people. It involves;
 Direct Mail Marketing: can have different results must be used properly because it is
an effective means of advertising. It can be done by professional who will help design
campaigns for the direct mails, copy writers too can use persuasive words target at
specific customers. Cost is dependent on size of campaign
 Door-to-Door Marketing: involves the use of trained sales personnel walking from
door to door selling products and services, they persuade customers in a polite way.
Used for insurance sales by personnel going door to door to sensitize people about
their policy and then persuade them to buy. Also products like magazines, cleaning
equipment that are available at big discount shops. Examples of brands;
o Lifebuoy moving from school to school to promote good health and likewise
their products
o Blue band also employ this means to reach out to their target customers
 Exterior Location Marketing: advert is done by some strategic staff outside
organization area at events or any area. Includes Sandwich-board style promotions or
the staff wearing a costume to draw attention of customers at a particular location. It
can be of great benefit to small businesses like restaurants, auto dealers etc.
 Email Marketing: for company that does personal campaign, in this method,
customers have direct contact with organization staff for enquiry and may be diverted
to another media for more enquiry. This marketing is of low cost and allows for
measurement of effectiveness of campaign. A subscription form can be used to obtain
interested customers information for email blast.
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Source: http://jobs.redbull.com/at/de/baden-wurttemberg-wings-team-mitarbeiterin-karlsruhe-
8129 Last seen 20 march, 2016.
Example: The Red Bull Mini is a great example of a BTL marketing campaign - free samples
are given face-to-face to people in local towns and cities.
Most times promotion is run with no cost, like the inter school cricket event organized by
pepsi for across 14 towns in 425 schools helped to promote the brand directing to target
customers with zero cost of advertisement. Another examples is the NIKE concept, where an
athlete dressed up in Nike sportswear was seen joggling on an elevated treadmill throughout
the day. Other examples are the use of ring tones and music videos on mobile phones for
artistes’ promotion or music promotion at a cheap rate compare to the normal media adverts,
some pharmacy companies also employ this technique through releasing free calcium to
patients via the doctors.
3.2 OTHER TECHNIQUES OF BELOW-THE-LINE PROMOTION
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Other below-the-line techniques promotion use to reach out to customers are using Hi-Tec
sports; (http://businesscasestudies.co.uk/hi-tec-sports/using-promotion-to-position-a-brand/
below-the-line-promotion.html#axzz43TghvEkp)
 Patnerships: Hi-Tec target customers are gotten through organizations, it set up
patnerships with the UK's National Trust (to promote a new walking boot) also with
Caravanning Club (an audience who might be interested in instantly comfortable and
lightweight outdoor footwear).
 Sponsorship: by using character branding for product promotion by appointing
ambassadors like Alexandre Poussin, the world explorer, and Martin Dreyer, from the
world of extreme sports, to endorse its products. Hi-Tec also uses sponsorship to
promote its brand. For example, it sponsors Amr Shabana, one of the world's leading
squash players.
 Exhibitions: at shows like trade and consumer they promote their products to retailers
and their customers, exhibition give them opportunity to be first to access the products.
 Sales promotions – H-Tec motivates retailers and customers to buy stock or buy it's
products by giving discounts.
 Public Relations: Hi-Tec also uses PR (Public Relations) to create a good image for its
products by issuing press releases, blogging and other social media platforms.
 Viral marketing: this happens when customers or informed people tell other interested
consumers either through internet or word to word. This mode help to spread
information very fast and it is well-generating.
Methods of below the line sales promotion
 Price Promotion can be done by discounting a price either by giving a discount
to the normal selling price or simply adding more products for the normal
selling price.
 Coupons can be used to increase sales of existing products or create awareness
for new products, coupons can be used on packs, in newspapers or the back of
receipts.
 Others are Point-of-sale-displays, money refunds, loyalty incentives etc.
TASK 4 4.1
Appropriate process for formulating a budget for integrated promotional strategy
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Due to the importance of promotion to success of every organization it is therefore essential
to set apart funds for the integrated promotional strategy. It is assumed that sales directly
measures the effort on advertising and promotions.
It is important to consider these factors in formulating a budget;
 Products Factors
 Market Factors
 Customers Factors
 Strategy factors
 Cost factors
SOURCE: 15 Methods for Setting up of Advertisement Budget under Top down Budgeting
Method. 2016. 15 Methods for Setting up of Advertisement Budget under Top down
Budgeting Method. [ONLINE] Available at:
http://www.yourarticlelibrary.com/advertising/15-methods-for-setting-up-of-advertisement-
budget-under-top-down-budgeting-method/22291/. [Accessed 20 March 2016].
The management can use the following approach;
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Top - Down Budgeting in which management set a spending limit for promotions and all
promotion budget stays in that limit
Bottom Up budgeting in which promotion objectives and activities are first analyzed, then the
cost to actualize the promotions strategy is budgeted and approved.
SOURCE: 15 Methods for Setting up of Advertisement Budget under Top down Budgeting
Method. 2016. 15 Methods for Setting up of Advertisement Budget under Top down
Budgeting Method. [ONLINE] Available at:
http://www.yourarticlelibrary.com/advertising/15-methods-for-setting-up-of-advertisement-
budget-under-top-down-budgeting-method/22291/. [Accessed 20 March 2016].
Formulating Budget includes;
Percentage sales: percentage of sales in which the management promotion budget is solely
base on sales of products, this is the most common budget approach and the easiest, this is
determined by various factors majorly the business, formulation of budget ranges from
business to business. In order for a business to have effective marketing plan it is required
that such business spend a minimum of 1 to 10 percent of the revenue from sales on
marketing. Also amount (volume) of sales can have impact on the sales revenue percentage
that will be channeled to marketing. To market new products will cost more could be up to 20
percent and more, the amount to be spent on marketing is determined by how fast the
company wants the products to grow, likewise in creating brand awareness in an unfamiliar
community marketing budget has to be more in percent than the percent of maintaining brand
awareness in a familiar community.
Competitive Parity: in this method, the company assumes its competitors have same
marketing goals therefore budget is drawn based the estimated spending of these competitors.
This method can help an organization to know how much it needs to spend as a whole on
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advertisement although comparing marketing is sometimes not reliable as sizes and
operations of different organizations differ.
Objective-Task: budget for advertising is drawn based of these factors;
 Target result that is the exact objectives of the advertisement
 Analyze and draw out all the strategies and processes necessary to achieve the results
or the objectives
 and the cost required for the completion of the strategies and processes
A critical analysis of this method allows organization to have sufficient amount for the
completion of the advertisement tasks.
All-You-Can-Afford: the affordable method in a summarize word means all what the
company can afford for promotions after setting aside funds for productions and organization
operations. In formulating an affordable budget for this exercise these are appropriate
processes;
 Analyzing Financial information: this is the foundation of them all, the current
financial strength of the company must be analyzed first, the reliable revenue
information of the company is examined based on minimum monthly income then
revenue inflow variations for the whole year are added up. Afterward subtraction of all
the organization expenses (salary, maintenance, purchases etc.) is done from the result
of addition this will give us the amount left can then be used for the promotional
strategy. The objectives of the promotional can be establishment of another branch,
repackaging etc whichever it is, the amount left is proper share amongst these
objectives.
 Determination of important marketing expenses: spending estimate of the amount
gotten above for promotions is done. The budget size depends greatly on this amount,
if the amount is small budget size is reduced. Also the previous experience on
marketing will help to decide which strategy is considered best and of great success.
 Making adjustment strategically: the aim of this integrated promotions strategy is to
increase income of the company if otherwise then the promotions are not worth it as a
part of the company's revenue that can be channel to more productions is being use,
there is therefore need to analyze the effectiveness of the promotions strategy and
make necessary adjustments for the sake of increasing sales and income for the
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organization. When all increase in sales is traceable to this promotion strategy then it
shows it is effective.
There are other approaches to formulating budget; also arbitrary allocations here budget is set
by the management on the basis of what they consider of importance.
4.2 DEVELOPING A PROMOTIONAL PLAN FOR A PRODUCT OR BUSINESS
To realize the goal of promotions which is to increase sales and income, it is essential that
promotions are properly planned for development and implementations of the promotional
strategy.
This requires careful management involvement, commitment and planning, so that the budget
and promotion can be effective (B. Balaji (phd); 2015).
While planning and executing the promotional plan and strategies, management must
remember that promotion only a part, and must be properly integrated into the overall
marketing plans and programmes (C & K Management; 2003).
For a product to thrive in the competing world the following promotional strategies are
essential and should be in a promotional plan
 GIFTS: an awesome way to provide additional value to customers is the use of free
gift with every purchase, the use of gifts to promote products is cost-effective. Most
people are excited to hear ‘free’ they rush to obtain one and when they do they will
always remember the organization that has given them, but it is important that
organization ensure the gifts are functional; valuable and appropriate to the recipient of
the gifts. A company that has many customer base to be ladies can include some
makeup kits as gifts pack. For example; some company that produce toothpaste add
tooth brush to the pack as free gift for customers. It is important to note the quality of
the gift pack too, a high quality gift pack will give customers positive thoughts
towards the organization. It is proven to increase sales if used strategically.
 DISCOUNT: a form in which basic prices of goods are reduced to attract customers,
discount can be percentage based in which a small percentage off is given to every
purchase it can be done to increase sales or to clear old stock; and also a dollar value
discount in which offers based on dollar value can be positioned as credit.
 OFFER: this can also be used to increase sales and additionally increase customers’
loyalty, in selecting the kind of offer to use it is important to review strategy of the
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organization. Offers include; Free shipping, season offers or holiday offers (e.g. black
Friday, Christmas), referral offers e.t.c.
 COUPON: this is also an effective sales tools for every kind of business, it can
expand the scope of the business, some customers can travel far to redeem a worthy
coupon. Coupon can draw new customers, old customers and also caused store traffic.
SOURCE: Google discount offer coupon image search; www.google.com/search
Steps in developing a promotional plan are;
- Identify the target customers
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Foremost in developing promotional plan is to identify prospective customers coupled
with their profiles, based on these findings you then set your marketing mix (place,
products, price and promotion) specifically to reach out to them. Promotions can be done
through adverts, publicity, awareness, special events etc.
- Decide Promotion Budget
You need to seek answers to the following questions; what, when, how, where promotion
budget is to be spent. As it been earlier pointed out that the main aim of promotions is to
increase sales and income so any promotional plan that will not lead to actualization of
this aim should be discarded. The following methods are commonly used by most
companies for decision on promotion budget;
 Based on profit on sales
 Based on the number of customers reached
 Compare with budget of direct competitors in the business
 Based on the objectives and required tasks
- Select component of promotion
As earlier mentioned in the above point, promotional components are advertisement,
publicity and the likes, the component selected can be a mix of traditional (advertising,
direct marketing etc.) and modern (online advert, online promotions etc) component but
selection should be based on the profile of target customers, the changing market trends
may also be a factor to consider.
- Understand the use of the component of promotion
After the above analysis it is important to have understanding on of the use of these
promotional components and how it works to generate more sales for your business.
You can use the opportunity of the internet Era we are in to generate great traffic for your
business by sending personalized emails known as email blast, design a banner for adverts
and use other social media platform available.
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SOURCE: Establishing Objectives and Budgeting for the Promotional Program. 2016.
Establishing Objectives and Budgeting for the Promotional Program.
[ONLINE] Available at:
https://www.slideshare.net/mobile/indrajitbage/establishing-objectives-and-
budgeting-for-the-promotional-program. [Accessed 20 March 2016].
4.3 PLANNING INTEGRATION OF PROMOTIONAL METHODS INTO
PROMOTIONAL STRATEGY FOR BUSINESSES
Promotional methods are the techniques used by the company to communicate to the target
customers they make up the promotional mix based on the communication mode.
Promotional methods includes; Advertising, promotion of sales, personal selling, direct
marketing, etc. The promotional method selected is then incorporated into the promotional
strategy to result into an integrated marketing communication.
Promotional strategy is the procedure employed by the company to reach out to target
customers about their products and services, it involves discounts, coupons, offers, gifts etc.
Sales Promotion: is the process of encouraging potential customers to purchase products or
services, this is a short term incentive used to increase sales therefore it is important to
employ a promotional strategy that will attract customers. Sales promotion method includes
discount, money off coupons given to customers from newspapers or package of product
giving lower price for next purchase of item, competitions whereby you offer customers a
chance to win a prize for purchasing your product.
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SOURCE: tutor2u. 2016. Sales Promotion | Business | tutor2u. [ONLINE] Available at:
http://www.tutor2u.net/business/reference/sales-promotion [Accessed 30 April 2016].
Public relation: a communication process strategically to build relationship with
organization’s publics for favorable publicity, good image and also to jettison bad news. This
communication process uses news releases, media statements, newsletter etc. it involves the
work of specialist who gives the public an insight into the activities of the company and
products offered then increase publicity.
Direct marketing: it involves linking up directly with a target customer to obtain a lasting
result and build a lasting relationship; it involves the use of direct mail, telephone, e-mail etc.
in direct marketing, offer made to target market can have the response tracked to know what
offer is yielding maximum result therefore it can be measurable. This form can improve
relationship with target market.
Using the social media promotional method integrated into promotional strategy as a case
study;
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Social media is one latest method of promotion it is more effective especially when the target
customers are connected to these social media, it is important to have a specific objective for
customers when using social media platforms. The social media platforms include; twitter,
facebook, instagram, snapchat etc. Facebook and Twitter have wide range of all age groups as
they are old social media platforms while snapchat and instagram have more of younger age
group, it is not necessary to be on all social media, the choice must fit into the target
customers and position the brand well.
The knowledge of how these social media works is of great importance and how it can
increase sales too so as to achieve the main aim of integration. The social media platforms are
less expensive compare to the traditional promotions methods but it should not deter one from
making proper analysis of its effect on the revenue of the business, weekly or monthly check
the traffic estimate on your social media platform to know what social media posts and
campaigns brought much traffic giving great impact on promotional strategy.
Integration of social media into company strategy is seamless, social media can help reach
out to target customers from anywhere in the world where internet connection exist unless
other promotion methods like personal selling or publicity that are local based.
4.4 USING APPROPRIATE TECHNIQUES FOR MEASURING CAMPAIGN
EFFECTIVENESS
Marketing is most important spending of a company, but it must yield appropriate result to
increase sales and increase revenue not keep the company stagnant. There is need to check
the effectiveness of the marketing campaigns.
Marketing Campaign Types
There are different types of marketing campaigns used by different companies at once.
Marketing theories bound by two school of thought are the outbound and the inbound
marketing theories; outbound strategy is a type of marketing strategy they involve sending
out products into marketplace to generate more buyers, usually via outbound calling, direct
mail, radio and TV adverts etc. Inbound strategy as a result of the present advanced
technology the inbound marketing is taking over from the outbound, this involve the strategic
placement of ads on different websites and social media also the use of campaigns to attract
traffic to your website can be via social media placement, Email marketing campaigns etc.
How to measure the effectiveness of the campaigns
Here are ways most companies track their marketing campaign results;
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Step 1 - campaign planning and tracking means: have a well thought out effective campaign
plan then proceed to select what methods will be appropriate to track the effectiveness
Step 2 - Define channels to track: in order to analyze campaign ads success, divide the traffic
derived from marketing into different subgroups one showing the traffic of potential
customers that located your store by direct manner either through your website on printed
papers these are the DIRECT SUBGROUP, another subgroup are traffic of potential
customers that located your website through another person, you can arrange a little package
for the referral this subgroup is called the REFERRAL SUBGROUP, others are the
ORGANIC SUBGROUP (traffic via search engines), EMAIL SUBGROUP (via email
campaigns ), PAID SUBGROUP (via an ad you paid for e.g. newspaper), SOCIAL
SUBGROUP (traffic via Internet social media surfing on twitter, facebook etc.), ETC.
Step 2 - Define the measurement quantity to be used: collect all the numerical data on market
campaigns and see if they meet set goals, collection of these numerical data can be through
page views that give data on the number of people that view your pages and the time they
spent on viewing it, it in a way show the success of your campaigns. Other processes of
collecting numerical data are Email opening, form conversion rate etc.
Step 4 - Campaign Measuring
As soon as the campaign has been uploaded, measure search using Google analytics, measure
the social media effectiveness using the media built-in analytics that show post effectiveness,
print ads and other media measurement either through connecting webpage to site links on
other websites or through establishing a URL for tracking.
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