Above-the-line (ATL) promotion
· Refers to the use of mass media sources to promote or to establish a favourable long-term image of a business, its brands or its products. E.g. television, magazines and radio.
· Advantages
- Large audience figures
- Customers tend to take more notice since they are interesting and appealing.
· Disadvantages
- May not appeal to the right segments or potential consumers.
- They are simply ignored since people switch channels.
- One-way communication, hard to determine the effectiveness.
· ATL include:
- Television advertising
§ Exploits the power of moving pictures.
§ Can be designed to meet specific needs.
§ Huge cost of producing and broadcasting on television.
- Radio advertising
§ Large audience and cheaper than television advertising.
§ Listeners are exposed to the promotions whilst they continue to do other things.
§ Advance in technology mean that radio commercials can be broadcast to almost anyone in the world.
§ It can only communicate audio messages, no visual impact.
§ Audience has lower attention levels.
- Cinema
§ Demand for visits to the cinema is income elastic.
§ Audiences can be directly targeted based on the movie.
§ Promotion can be tailored to the specific market segments.
§ Marketers have a captive audience since it cannot be switched off.
§ Limited audience as main drawback.
- Newspaper advertising
§ Reaching a wide audience and much cheaper than TV advertising.
§ Better target different markets. (E.g. teaching – specialist newspaper for teachers.)
§ High costs, particularly for small business.
§ It tends to have a very short shelf life.
- Magazines:
§ Being able to use high photo-quality colour images to attract the attention of the reader.
§ Possible to use specialized magazine for targeting market.
§ It is static hence easy to place several different advertisements in magazines.
§ Readers may accidently miss, or deliberately ignore because they are bombard.
§ There is a long lead-time between submitting an advertisement and publication.
- Outdoor advertising:
§ The use of commercial billboards, banners and posters to promote a business.
§ With advances in technology such as digital billboard, that can combine moving images and sound.
§ There is high rate of exposure to the advertisements, especially as business will use the same advertisements in many different locations.
§ Difficult to monitor the effectiveness of outdoor advertising.
§ Traditional billboards are also prone to damage due to bad weather and so on.
§ High levels of competition in terms of advertising clutter.
§ It creates ‘advertising pollution’ such as eyesore and a distraction.
Below-the line (BTL) promotion
· Definition: the use of non-mass-media promotional activities.
· Examples: free samples of toiletries, food and drinks, discount vouchers and added-value promotions such as ‘buy two, get one free’
· BTL include:
- Branding
§ The idea of it is using brands to promote a business or its products.
§ By this way company have to spend a huge amount of money each year on promoting brand awareness.
- Slogans
§ One way that business try to catch and retain the attention of customers is through the use of memorable catchphrases. A catchphrase is a concise message designed to represent the essence of a business or its products in a memorable set of words.
- Logos
§ Logos are essentially a form of branding that uses a visual symbol to represent a business, its brands or its products.
- Packaging
§ Packaging can be a powerful component of the marketing mix. For example, almost every manufacturer and retailer provides carrier bags or protective packaging for their product that displays that name of the business.
- Word-of-mouth promotion
§ Word of mouth refers to the spreading of information from one person to another through oral communication.
§ It is possibly the most effective form of promotion since messages about a product are passed onto friends and family without any direct costs to the firm.
- Direct marketing
§ Direct marketing refers to promotional activities that aim to sell a product straight to a customer rather than using an intermediary.
§ The advantages of using direct marketing are that the business can take a larger share of any profits, since there are no intermediaries to pay. In addition, the business is free to market its products in a way that it sees fit rather than passing on control marketing to an external agency.
§ The major drawback of direct marketing is the cost of producing and distributing promotional material. In addition, research has shown that most people disregard and dispose of most ‘junk’ or unsolicited mail and that they do not welcome unwarranted telephone calls from telesales personnel.
- Direct mail
§ Direct mail is an example of direct marketing that involves mailing promotional material to the home addresses of customers in an attempt to persuade them to buy a firm’s products.
§ Due to the large volume of direct mail, a major drawback of this method is that people tend to regard most promotional material sent through the post as junk mail and hence it is waste resource.
- Sales promotions
§ Sales promotions are temporary ways of boosting sales and attracting new buyers.
§ Sales promotions can be beneficial to a business because they boost sales (at least in short run). They can also sway customers away from other firms and brands. More importantly, sales promotion encourages ‘action’ (the desire to make a purchase), rather than informing or reminding customers about a product.
§ However, there are drawbacks in suing sales promotion is reducing the profits margin on each product. In addition. These tactics are only short term and may not be sustainable in the long term, so other strategies still need to be devised for the future.
- Point-of-sales promotion
§ The promotion of a product at the place or location where the customer buys the product.
§ At the supermarket, whilst customers are waiting in line, they are exposed to the promotion and sales of batteries, confectionary items and magazines.
- Publicity
§ It is the process of promoting a business and its products by getting media coverage without directly paying for it. (Ferrari gives away a car to football celebrity David Beckham.)
- Sponsorship
§ Involves a business providing financial funds and resources to support an event or an organization in return for publicity and prime advertising space.
Promotional Mix
· It refers to the range of ATL & BTL methods used to market a product as part of the larger marketing mix.
· AIDA is often considered in deciding on a promotional mix.
- Attention
Raise existing and potential customers’ awareness of the product by engaging their attention.
- Interest
Stimulate and keep interested, e.g. by using memorable and interesting advertisements.
- Desire
Generate a desire or feeling of ‘need’ for the product, e.g. free samples to lure customers.
- Action
Encourages customers to take action, e.g. use of discount vouchers or other sales promotion methods.
· The factors that need to be considered when devising a promotional strategy.
- Cost of promotional medium
Although TV advertising has the highest potential reach, it is also the most expensive. Business may instead consider the cost per head when selecting the appropriate methods of promotion to use.
- The nature of the product
Certain products are suited to a particular type of promotion like insurance services and financial planning are highly suited to personal selling whereas beauty and cosmetic products are suited to women’s magazine.
- The products’ position in its life cycle
During the launch stage of a product’s life cycle, there will be extensive promotion to get the product noticed and established in the market.
- Legislation
Laws may prevent certain products (e.g. tobacco products) from being advertised in certain media such as on television. This means that other forms of promotion are required.
· The Charted Institute of Marketing puts forward 4 key elements to make up a promotional mix.
- Advertising
§ Advertising can be used to shape and develop awareness, perceptions, knowledge and attitudes.
§ It refers to any kind of paid-for communication.
§ It is usually classified as being informative, persuasive or a combination of both.
§ Important to be distinctive – what is said and how it is said.
§ Business will employ an advertising agency.
- Personal selling
§ It refers to promotional techniques that rely on sales representatives directly helping and persuading potential and existing customers to make a purchase.
§ Method included:
o Sales presentations
o Face-to-face meetings with clients
o Telemarketing (telephone sales)
o Door-to-door sales.
§ Common used in the provision of financial services. E.g. health insurance.
§ Also used by real estate agencies in the sale and rental of commercial and residential property.
§ It can tailored to the individual needs of the customer. It helps the business to build a positive, trusting and long-term relationship with the customer.
§ Sales agents can be very expensive to hire. E.g. sale representative are rewarded accordingly.
- Public relation (PR)
§ Definition: business activities aimed at establishing and protecting the desired image of an organization.
§ PR is concerned with getting good press coverage, usually without directly paying for it.
§ PR is a long-term and ongoing strategy so PR experts are relied upon heavily when a business faces a crisis.
§ E.g. having a presence at trade shows and exhibitions can also help a business to promote its image to a selected target audience. Examples include having a launch party for a new product, organizing press conferences and radio or television interviews, donating to charities and distributing company literature.
- Sales promotion
§ Definition: it is a short-term incentives designed to stimulate sales of a product.
§ It can help firms to gain a short-term competitive head start, get rid of excess of old stock and encourage customer loyalty.
§ However, it can be very expensive, so marketing managers will carefully monitor the progress of the campaigns to ensure that costs are kept under control.
§ E.g. the use of discount coupons, prize draws, trade fairs and free product samples are examples.