Promotion strategies
Promotion is how a business communicates with customers — telling them the product exists and persuading them to buy it. The specification names five strategies, and asks for them to be matched to different market segments rather than simply listed.
Matching the strategy to the segment is what the specification actually asks for, and it follows from 1.2.3. A segment defined by age responds to different media from one defined by income. A segment defined by lifestyle — people who follow a particular sport — is reached efficiently by sponsorship of that sport, and inefficiently by general advertising. A price-sensitive segment responds to special offers; a premium segment may be put off by them, because constant discounting signals that the product is not worth its price.
That last point is worth remembering: a promotion that works for one segment can actively damage the appeal to another.
- Promotion
- how a business communicates with customers — telling them the product exists and persuading them to buy it
The use of technology in promotion
The specification names three uses of technology in promotion.
Targeted advertising online. Adverts shown to people selected by their age, location, interests or browsing history. It is far more efficient than broadcasting to everyone, because the business pays to reach people likely to be interested — and the response can be measured precisely, which traditional advertising cannot.
Viral advertising via social media. Content shared by users themselves, spreading without the business paying for each view. It is extraordinarily cheap relative to its reach when it works. But it cannot be relied on: most attempts do not spread, and content that does spread can be reinterpreted or mocked, damaging the brand.
E-newsletters. Emails sent to customers who have provided their address, carrying offers, new products and news. Very cheap, and it reaches people who have already shown interest — so the response rate is high. But too many emails cause people to unsubscribe, and rules on data and consent must be followed.
Worked example
A small skateboard business with a limited budget wants to promote a new board to 14 to 20 year olds. Recommend a promotion strategy.
- Identify the segment: young, defined by age and by lifestyle, and heavy users of social media.
- Rule out what does not fit: television or press advertising is too expensive for a small business and would reach mostly the wrong people.
- Choose what does: social media content, which is cheap and reaches exactly this group where they already are.
- Add a second, complementary strategy: sponsoring a local skater or event reaches the same lifestyle segment and builds credibility with it.
- Note the risk so the recommendation is balanced.
Answer: Social media promotion, with the possibility of content being shared, plus sponsorship of a local skater or event. Both are cheap enough for a small budget and reach a segment defined by age and lifestyle far more precisely than advertising would. The risk is that viral spread cannot be relied on, and that comments and reactions are outside the business's control.
Common mistake
Promotion is not only advertising. Sponsorship, product trials, special offers and branding are all promotion strategies, and a question asking for two strategies wants two different ones — not two kinds of advert.
Before you practise
- The five strategies: advertising, sponsorship, product trials, special offers, branding.
- Match the strategy to the segment — a promotion that suits one segment can damage appeal to another.
- Special offers suit price-sensitive segments but can undermine a premium brand.
- Technology in promotion: targeted advertising online, viral advertising via social media, e-newsletters.
- Digital promotion is cheaper, better targeted and measurable.
- But it reaches only people on that platform, and the business does not control the response.
- Branding is the slowest and most expensive to build, and the most valuable once established.