Commerce | Promotion

Welcome to the World of Promotion!

Hello future business experts! Don't worry if the word "Promotion" sounds formal. This chapter is actually one of the most fun and relevant parts of Commerce because it explains why you buy the things you do!

We are studying Aids for Commerce – all the things that help trade happen smoothly. Production gets the goods made, but Promotion is the tool that tells the world those goods exist and persuades people to buy them. Think of it as the business’s loud voice!

What You Will Learn in This Chapter:

• What Promotion is and why businesses need it.
• The main goals (objectives) of all promotional efforts.
• The four key methods (the Promotional Mix) used to attract customers.

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1. Defining Promotion and its Importance

What is Promotion?

Promotion is defined as all the activities a business undertakes to communicate with its customers. The goal is to inform, persuade, and remind them about the products or services offered.

Analogy Alert!

Imagine you have a fantastic new mobile phone to sell. If you just put it on a shelf in an empty room and lock the door, how many will you sell? Zero! Promotion is like unlocking the door, putting up bright signs, telling people why your phone is better than others, and offering a discount to encourage them to walk in.

Why is Promotion Necessary?

In today's busy marketplace, promotion is vital because:

1. High Competition: Every product has many rivals. Promotion helps the product stand out.
2. Consumer Choice: Customers have too many options. Promotion highlights the benefits of a specific product.
3. Introducing New Products: When a new product launches, people need to be informed about what it is and where to find it.
4. Building Brand Loyalty: Regular promotion (like repeat adverts) reminds customers why they love the brand, keeping them loyal.

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2. The Objectives of Promotion

Every time a business launches an advertising campaign or hands out free samples, they have a clear goal in mind. These goals are often summarised using a famous marketing acronym:

The AIDA Model – Goals of Promotional Activities

Promotion is designed to move a potential customer through four stages:

1. Attention (or Awareness):

Goal: To make the potential customer aware that the product exists.
Example: A catchy jingle on the radio, or a huge billboard.

2. Interest:

Goal: Once aware, the customer must want to learn more.
Example: Providing details about the product's features (e.g., "This laptop battery lasts 12 hours!").

3. Desire:

Goal: To move the customer from simply liking the product to genuinely wanting to own it.
Example: Showing how the product will improve their life or solve a problem (e.g., demonstrating the ease of a new vacuum cleaner).

4. Action:

Goal: To encourage the customer to make the final purchase.
Example: Offering a limited-time discount or a "Buy now!" prompt.

Memory Trick!

Remember AIDA: Always Intend to Drive Action.

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3. The Promotional Mix: The Four Main Tools

The Promotional Mix refers to the specific combination of methods a business uses to communicate with its customers. There are four main elements you must know:

1. Advertising
2. Sales Promotion
3. Public Relations (PR)
4. Personal Selling

A. Advertising

Advertising is defined as any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

Key characteristics:

• It costs money (it is paid).
• It uses mass media (it is non-personal).
• The company paying for it is clearly stated (the sponsor is identified).

Types of Advertising Media:

Businesses choose media based on cost, target audience, and reach.

Medium	Description & Example	Advantage
Print Media	Newspapers, magazines, flyers. (Great for local targeting)	Can hold detailed information; lasts longer than a radio ad.
Broadcast Media	Television, Radio. (Reaches a huge, mass audience quickly)	TV uses sight and sound; Radio is effective for commuters.
Outdoor Media	Billboards, posters, signs on buses. (Constant visibility)	Low cost per view; reaches people on the move.
Digital Media	Social media ads (e.g., Instagram), search engine marketing (e.g., Google ads), email. (Highly targeted)	Can be highly personalised and measurable (you know exactly how many people clicked).

B. Sales Promotion

Sales Promotion involves short-term incentives or activities designed to encourage immediate purchase of a product or service. This is often used to boost sales quickly.

Common Sales Promotion Techniques:

• Price Promotions: Discounts, money-off vouchers, or coupons.
• Samples: Giving a small amount of the product away for free. (Common for new foods or perfumes.)
• Bonus Packs/BOGOF: Offering extra quantity or a second item for free. (Buy One Get One Free.)
• Competitions/Contests: Offering prizes to encourage participation and purchase. (e.g., "Win a car if you buy this drink!")
• Point-of-Sale (POS) Displays: Attractive displays placed right next to the cash register to encourage impulse buying.

Did You Know?

The difference between Advertising and Sales Promotion is time. Advertising works to build a brand’s image long-term, while Sales Promotion aims for a quick, short-term sales boost.

C. Public Relations (PR)

Public Relations (PR) involves managing and communicating with the public to build and maintain a positive image (goodwill) between the organisation and its stakeholders (customers, employees, community, media).

Key characteristic: Unlike advertising, PR often involves getting media exposure that the company does not pay for (called publicity or earned media).

PR Tools and Activities:

• Press Releases: Sending official statements to newspapers about company news (e.g., a new factory opening or a charity donation).
• Sponsorship: Funding a local sporting team, an arts event, or a charity run. This links the company's name with positive community efforts.
• Handling Crises: Managing negative publicity (like a product recall) to minimise damage to the brand’s reputation.
• Lobbying: Communicating with government officials to influence laws or regulations.

Why is PR Important?

A positive public image (goodwill) makes customers trust the company more, making them more likely to buy, even if competitors are slightly cheaper.

D. Personal Selling

Personal Selling involves direct, face-to-face communication between a company representative (salesperson) and one or more potential customers with the aim of making a sale.

Example: Selling insurance, high-end cars, expensive industrial equipment, or B2B (Business-to-Business) services.

Advantages of Personal Selling:

• Customisation: The sales message can be tailored to the specific needs and questions of the customer.
• Immediate Feedback: The salesperson knows immediately if the customer is interested or if they need more convincing.
• Closing the Deal: It is highly effective for convincing customers to buy high-value or complex items.

Disadvantages of Personal Selling:

• High Cost: The salary, commission, and travel expenses for a sales team are very high per customer reached.
• Limited Reach: Salespeople can only talk to one customer (or a small group) at a time.

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4. Factors Affecting the Choice of Promotional Mix

Don't worry, a business doesn't just pick methods randomly! They carefully consider which tools from the Promotional Mix (A, SP, PR, PS) will work best based on several factors:

1. The Product Type:
• Complex/Expensive Goods: Products like machinery or luxury homes require Personal Selling.
• Simple/Fast-Moving Consumer Goods (FMCG): Products like soft drinks or soap rely heavily on Advertising and Sales Promotion.
2. The Stage of the Product Life Cycle (PLC):
• Introduction Stage: Focus is on Advertising (to inform) and Sales Promotion (to encourage trial).
• Maturity Stage: Focus is on Reminding the customer (using reminder advertising) and defending market share (using PR and loyalty programs).
3. The Target Audience:
• If the audience is the general public, mass Advertising (TV, radio) is best.
• If the audience is a small group of specialists (e.g., surgeons), Personal Selling and specialised magazines are used.
4. The Budget Available:
• Small firms often cannot afford expensive national TV Advertising and rely instead on local print media, flyers, and digital ads.

Common Mistake to Avoid: Students sometimes confuse Advertising and Public Relations. Remember: Advertising is PAID space; PR is usually EARNED media exposure through positive news or events.

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Chapter Summary: Key Takeaways

You have successfully navigated the voice of Commerce! Here are the absolute core ideas:

• Promotion is the communication process used to inform, persuade, and remind customers.
• The main goals are summarised by AIDA (Attention, Interest, Desire, Action).
• The Promotional Mix includes Advertising, Sales Promotion, Public Relations, and Personal Selling.
• Advertising is paid, non-personal, mass communication.
• Sales Promotion uses short-term incentives (like BOGOF) to drive immediate sales.
• Public Relations builds goodwill and a positive image, often through unpaid publicity.
• Personal Selling is highly tailored, expensive, face-to-face interaction, best for complex products.

Keep practising those definitions and examples—you’ve got this!