Promoting products and services

by Business Case Studies on Monday 18th April, 2011

We are used to seeing advertisements in a whole host of different places such as television, newspapers, billboards and buses. From May 2011, however, American readers may be getting adverts through a different medium – the Amazon Kindle. Amazon is about to launch a subsidised version of its e-book reader which features on-screen advertising. The e-book will retail for less than the current models, and will feature sponsored messages from organisations such as Visa and Olay. It will also promote other products offered by Amazon. The advertising messages will appear at the bottom of the home screen when turned on and on the full screen when the Kindle is not in use. According to Eden Zoller from Ovum, a technology analysis firm, Amazon is 'effectively starting to build a mobile advertising ecosystem, something it has lacked and where rivals like Apple and Google are well ahead of the game'. It is unknown at this stage whether the ad-subsidised Kindle will be launched in the UK. (BBC News 12th April 2011)

Kindle advertising would be suitable for businesses selling products in consumer markets. For Parcelforce Worldwide, the leading provider of express parcel deliveries, appropriate methods are adopted to promote both their business to business (B2B) services and their business to consumer (B2C) services. For example, Parcelforce Worldwide uses above-the-line promotion in the form of online banner advertisements to highlight the availability of its services to consumers. It also uses direct mail, a below-the-line method of promotion, to contact thousands of UK businesses informing them of the new services they offer. In addition to this, it emails existing customers to keep them updated and develop its relationships with these customers. As promotional activities can be expensive, Parcelforce Worldwide aims to use methods that are likely to provide the largest return on their promotional investments.

Questions

1. Other than promotion, what are the other three Ps of the marketing mix?

2. Using the Parcelforce case study, explain what is meant by above-the-line and below-the-line promotion.

3. To what extent can promotion be considered the most important element of the marketing mix?

Answers

1.Other than promotion, what are the other three Ps of the marketing mix?

  • Product
  • Price
  • Place

2.Using the Parcelforce case study, explain what is meant by above-the-line and below-the-line promotion. Give examples of each.

  • Above-the-line promotion uses paid-for, mass media advertising such as television, radio and newspapers.
  • Below-the-line uses other methods of promotion which are under the control of the organisation e.g. sponsorship, direct mail, sales promotions and public relations.

3.To what extent can promotion be considered the most important element of the marketing mix?

On one hand:

  • If consumers are not aware that a product or service exists then it is unlikely to be successful.
  • In competitive markets, promotion may be necessary to protect sales and market share.
  • Promotion can change the whole image of an organisation and therefore can have long lasting, companywide impact.

On the other hand:

  • The product/service must meet the customers' needs and wants for it to be successful in the long term, regardless on the amount of the promotion carried out.
  • The product/service must be seen to be value for money. If the price is too high people won't buy. It the price is set too low then the firm may not cover its costs.
  • The product/service must be made available to consumers in a convenient way for sales to occur.

The importance of promotion depends on:

  • How well known the firm or product is. For well-established 'cash cow' products, little promotion may be needed. However, for newer products on the market, greater promotion will be needed to raise awareness and encourage sales.

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