National 5BusinessSQABusiness ManagementRevision NotesManagement of MarketingMarketing MixPromotional Strategies

Promotional Strategies (SQA National 5 Business Management): Revision Note

Exam code: X810 75

Lisa Eades

Written by: Lisa Eades

Reviewed by: Steve Vorster

Updated on

Introduction to promotional strategies

  • Promotional strategies are the methods businesses use to communicate with customers

  • They are used to increase awareness and encourage people to buy their products or services
    They form part of the marketing mix and aim to

    • Inform customers about products

    • Persuade them to buy

    • Remind them of the brand and its benefits

Special offers

  • Special offers are short-term price deals or promotions designed to encourage quick sales or attract new customers

Examples of special offers

Buy one get one free, 20% off, and mega deal graphics in bold, colourful fonts, emphasising promotional offers and discounts.
Examples of special offers include Buy One Get One Free (BOGOF), price discounts and multi-buy deals

  • Tesco regularly uses 'Clubcard Prices' and short-term multibuy offers in its Scottish stores to increase footfall and boost sales of everyday groceries

Evaluating the use of special offers

Advantages

Disadvantages

  • Can boost short-term sales and attract new customers

  • Helps clear old or excess stock quickly

  • Encourages customers to try a new or competing product

  • Profit margins are reduced during the promotion

  • Customers may wait for offers before buying again

  • Frequent promotions can make the brand seem less valuable

Incentives

  • Incentives are rewards or benefits given to customers to encourage them to buy or stay loyal

    • Examples include loyalty cards, free samples, competitions or discounts for repeat purchases

  • ScotRail uses its 'Smartcard rewards' system, offering discounts on tickets and partner deals, such as money off cafés or attractions, to encourage regular commuters to travel more often

Evaluating the use of incentives

Advantages

Disadvantages

  • Encourages repeat purchases and builds customer loyalty

  • Helps attract new customers who want to take advantage of the reward

  • Can increase customer satisfaction and positive brand image

  • Can be expensive to run or maintain (e.g. loyalty points, free gifts)

  • May only attract customers interested in the incentive rather than the product itself

  • Over time, customers may expect incentives as standard, reducing their effect

Celebrity endorsement

  • Celebrity endorsement involves using a famous person, such as an actor, athlete or influencer, to promote a product or brand

  • Customers associate the celebrity’s image and reputation with the product, making it appear more desirable or trustworthy

  • Scottish Rugby partnered with Chris Paterson, a former Scotland international player, to promote its youth development and community programmes

    • His reputation and popularity helped raise awareness and strengthen public trust in the organisation

Evaluating the use of celebrity endorsement

Advantages

Disadvantages

  • Raises brand awareness quickly due to the celebrity’s popularity

  • Builds trust and credibility if the celebrity fits the brand image

  • Attracts new customers and can make a product seem more fashionable or aspirational

  • It can be very expensive to hire well-known personalities

  • If the celebrity’s reputation is damaged, the brand may also suffer

  • The focus may shift to the celebrity rather than the product

Examiner Tips and Tricks

Always explain why a business uses each method

For instance, coupons encourage repeat sales, competitions create interest, and loyalty cards build customer ties

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    Author
    Reviewer
    Lisa Eades

    Author: Lisa Eades

    Expertise: Business Content Creator

    Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

    Steve Vorster

    Reviewer: Steve Vorster

    Expertise: Economics & Business Subject Lead

    Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.