Promotion (Cambridge (CIE) IGCSE Business): Revision Note

Reasons for promotion

• Promotion refers to all the activities a business uses to inform, persuade, and remind customers about its products or services, with the aim of increasing sales and building brand loyalty

  • Promotion communicates a business's value proposition to potential customers and helps to differentiate the product or business from competitors

  • Promotion plays a crucial role in generating customer awareness, interest and desire for a product

The main aims of promotion

1. Enhance brand and business image

   • Promotion helps build a strong, positive image of the business. It can show the brand as trustworthy, high-quality, ethical, or innovative

   • For example, Apple uses sleek advertising to reinforce its image as a premium, cutting-edge brand

2. Compete with rivals

   • In competitive markets, promotion helps a business stand out. Special offers, adverts or sponsorships can attract customers away from competitors

   • For example, Burger King and McDonald's use adverts and discounts to compete for customers

3. Support new products

   • When launching a new product, promotion creates awareness and interest. It helps customers learn what the product is and why they should try it

   • For example, a soft drinks company might offer free samples in supermarkets when introducing a new flavour

4. Increase sales revenue

   • Well-planned promotion can boost sales by encouraging more people to buy, or to buy more often

   • For example, limited-time discounts or “Buy 1, Get 1 Free” deals increase customer purchases

5. Provide information

   • Promotion can be used to inform customers about product features, prices, store locations, or changes to the business

   • For example, a bank may use advertising to explain new mobile banking features to its customers

Methods of sales promotion

• Sales promotion is a short-term marketing strategy used to encourage customers to buy a product

• It often includes special deals or incentives and is designed to boost sales quickly or support a new product launch

Methods of sales promotion

Vouchers

• Customers are given a coupon or code offering money off a future purchase

Reward schemes

• Customers earn points or rewards for regular purchases

Competitions

• Customers enter to win a prize, often by buying a product or taking part in an activity

Special offers and discounts

• Temporary price reductions like 20% off or Buy One, Get One Free

Recommending a suitable sales promotion

• A business must carefully choose the right type of sales promotion to suit its product, customers and objectives

Factors affecting the choice of sales promotion

Target market

• The type of customers the business wants to reach will influence the promotion

  • For example, young customers might respond well to competitions or online discounts, while regular shoppers may prefer reward schemes

Type of product

• Some promotions work better for certain products

  • For example, Buy One, Get One Free is effective for fast-moving items like snacks, but not for expensive goods like electronics

Stage in the product life cycle

• Sales promotions are often used during product launch or maturity stages

  • For example, a new product might use vouchers to attract first-time buyers, while a mature product might offer discounts to boost slowing sales

Promotion objectives

• The business must be clear on what it wants to achieve

  • For example, if the objective is to build loyalty, a reward scheme may be best, but if the objective is to quickly increase sales, a discount might be more suitable

Budget available

• The business must consider how much money it has to spend

  • For example, competitions with prizes or large discount campaigns can be costly, so may not be suitable for small businesses

Methods of advertising

• Advertising is a form of paid promotion used by businesses to inform, persuade or remind customers about their products or services

• It aims to increase sales, build brand awareness and attract new customers through different media such as TV, social media, billboards or print

Social media

• Using platforms like Instagram, TikTok or Facebook to promote products and interact with customers

Targeted emails

• Sending promotional emails to specific customers based on their interests or past purchases

Leaflets

• Printed materials handed out or delivered to promote a product, service or event

Billboards

• Large outdoor posters placed in high-traffic areas to catch public attention

Recommending a suitable method of advertising

• Businesses must choose the right type of advertising based on several important factors

  • Target market

    • The advertising method should match the age, interests and habits of the target customer

    • For example, social media is good for reaching young people

  • Cost and budget

    • Some methods like billboards or TV adverts are expensive, while others like social media or leaflets are more affordable

  • Type of product

    • Products with visual appeal, like fashion items or food, may benefit from image-based adverts on platforms like Instagram or billboards

  • Message content

    • If the advert needs to give detailed information, methods like emails or leaflets may be more suitable than a billboard

  • Reach

    • Businesses may choose national advertising for large markets or local advertising, using posters or flyers, for smaller areas