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Product Promotion - Business Studies Form 2

Objectives

By the end of the topic you should be able to:

    • Explain the meaning of a product.
    • Explain the meaning and importance of product promotion.
    • Explain the various methods of product promotion.
    • Explain the advantages and disadvantages of each method of product promotion.
    • Discuss factors which influence choice of product promotion.
    • Recognize the need for ethical practices in product promotion.
    • Discuss trends in product promotion.

Product Promotion

This is a promotion of Britania biscuits at Nairobi International Trade Fair. Note the persuasive language, information and the elaborate colours of their uniform.


Play to view

Background

The main aim of any business is to maximize profit. This may be achieved through increased sales. In order for a business to increase its sales volume and to compete favourably with other businesses, it has to create awareness, convince and persuade potential customers to buy its products.

A branded lorry used in product promotion

Meaning of a Product

It is a good or service offered for sale in the market to satisfy human wants.

Meaning of Product Promotion.

This is the art of providing information about a product to its prospective users in order to persuade them to buy, use and enjoy it.

This painting is promoting the products of the school.

Methods of product promotion

Methods of product promotion are ways of providing information about a particular product to potential users.

Personal selling

Personal selling is a face to face method of product promotion where a sales person physically presents a product to existing and potential customers. The sales person should have a thorough knowledge of the product and be able to explain and demonstrate the use of the product thereby persuading the potential customers to buy. The customer is provided with an opportunity to ask questions and test the product before buying. Personal selling takes place either in the field or in the shop.

Advantages of Personal Selling


    Advantages of Personal Selling includes:
    • The seller is able to demonstrate the product.
    • The potential customers are able to see and test the product before buying.
    • Most of the sales persons are very convincing hence difficult to ignore.
    • Buyers and sellers get immediate feedback.
    • It caters for both illiterate and literate customers.
    • The seller can modify the presentations to address specific customer demands(flexibility)


    Disadvantages of Personal Selling includes:
    • It covers a limited geographical area.
    • It can be affected by personal biases e.g. emotional changes,judgment, attitude etc
    • It is an expensive method of promotion.
    • It is time and energy consuming.
    • Sale person may misuse business resources e.g. Time and vehicles etc
    • The seller is able to demonstrate the product.
    • The potential customers are able to see and test the product before buying.
    • Most of the sales persons are very convincing hence difficult to ignore.
    • Buyers and sellers get immediate feedback.
    • It caters for both illiterate and literate customers.
    • The seller can modify the presentations to address specific customer demands(flexibility)

Advertising

Advertising is a form of a communication used to help sell goods and services. Normally it communicates a message including the name of the good or service and how that good or service could potentially benefit the consumer. However, Advertising does usually attempt to persuade potential consumers to buy or to consume more of a particular brand of a good or service. Advertising can be effected through such media like television, radio, cinema, magazines, newspaper, billboards and internet among others.


Advantages of Advertising

  • It has a wide geographical coverage.
  • It is interesting especially when accompanied by music, pictures etc.
  • It creates and sustains brand loyalty.
  • It stimulates desire for a product thereby increasing sales.
  • The advertiser can choose the advertising time to fit his/her audience.

Disadvantages of Advertising

    • It is an expensive method of product promotion.
    • It is manipulative for example it can lead to impulse buying.
    • It can take advantage the consumers ignorance and mislead them.
    • Some advertisements go against moral values of the society.
    • It lacks personal touch or contact.

Types of advertising

Product advertising

This is a type of advertising meant to promote sale of a specific product. The manufacturer is not mentioned in the advertisement at all.



Institutional advertising

This is a type of advertising which aims at creating a positive image towards a business producing certain products.An example of this is the advert by Toyota kenya which said

"The vehicle infront is always a Toyota"

 

Primary demand advertising

This is a type of advertising which stimulates demand for a range of products without specifically mentioning the brand or manufacturer.

For example an advertisement of water saying:

"Water is Life;Drink it,live longer!."



Celebrity Advertising

This is a type of advertising which uses a famous personality to approve the use of a given product.Examples of celebrity advertising include :

  • Yvonne Chaka Chaka and Lifebuoy advert
  • Paul Tergat and Lewa marathon
  • Nyambane in Herpic advert
  • Mwala and Mbotela in Zain and safaricom adverts

Corrective advertising

This is a type of advertising which seeks to correct errors or misleading claims made in an earlier advertisement.

An example is the adverts sponsored by Kenya Breweries to counter allegations that Alvaro,a soft drink, is alcoholic.




Informative Advertising

This is a type of advertising which is meant to merely supply the customer with information about a given product.




Competitive or persuasive Advertising

This is a type of advertising which try to convince the consumer that the product is the best in its category.



Types of advertising

Product advertising

This is a type of advertising meant to promote sale of a specific product. The manufacturer is not mentioned in the advertisement at all.



Institutional advertising

This is a type of advertising which aims at creating a positive image towards a business producing certain products.An example of this is the advert by Toyota kenya which said

"The vehicle infront is always a Toyota"

 

Primary demand advertising

This is a type of advertising which stimulates demand for a range of products without specifically mentioning the brand or manufacturer.

For example an advertisement of water saying:

"Water is Life;Drink it,live longer!."



Celebrity Advertising

This is a type of advertising which uses a famous personality to approve the use of a given product.Examples of celebrity advertising include :

  • Yvonne Chaka Chaka and Lifebuoy advert
  • Paul Tergat and Lewa marathon
  • Nyambane in Herpic advert
  • Mwala and Mbotela in Zain and safaricom adverts

Corrective advertising

This is a type of advertising which seeks to correct errors or misleading claims made in an earlier advertisement.

An example is the adverts sponsored by Kenya Breweries to counter allegations that Alvaro,a soft drink, is alcoholic.



Informative Advertising

This is a type of advertising which is meant to merely supply the customer with information about a given product.




Competitive or persuasive Advertising

This is a type of advertising which try to convince the consumer that the product is the best in its category.



Sales Promotion

Sales Promotion are strategies and incentives which are aimed at increasing the purchase of a product usually at the point of sale. There are various methods of sales promotion.They include Free gifts, Free sample, Display, Discounts ,trade credits.Trade fairs and exhibitions.

Click at the menu bar at the top to learn more about them.

Advantages of sales promotion

The following are the advantages of sales promotion

  • Gives an opportunity to consumers to buy products at reduced prices.
  • Helps to build goodwill for the business assuring it of sales in future.
  • Provides the customer with an opportunity to see and test the product before deciding to buy it.
  • Enables Customers to acquire skills to operate technical goods through demonstration, testing, installation etc.

Disadvantages of sales promotion

The following are the disadvantages of sales promotion

  • The Credit facilities given as a way of attracting customers may lead to bad debts i.e. debts which are difficulty to recover
  • Some strategies of sales promotion are expensive e.g. free samples and trade fairs
  • Some sales promotion incentives such as credit facilities and discounts may lead to impulse buying i.e. buying of things not budgeted for
  • After sale services may tie customers to one seller for maintenance services

Free gifts and Samples

Free gifts

This is giving out an items free of charge after purchasing a particular product.

Free sample

This refers to a small quantity of a product given free of charge to prospective customers to test and induce them to buy.

Display

This is a systematic and attractive presentation of products for sale which facilitates easy customer selection and buying.

Discounts

This is the reduction of price of goods and services in order to attract customers to buy.

Credit facilities

This is where trusted customers are given goods or services on credit for payment to be made at a later or future date

Toyota Hilux manufacturers entices customers to buy by oferring the pick up on credit.

After Sales Service

These are services provided by sellers to customers after they have purchased certain goods of technical nature such as computers,televisions,radios,vehicles etc.After sale services include free installation, free transport, free assembling, repair and maintenance and offer of guarantees.



Trade fairs and exhibition

This is a forum where different producers display and demonstrate their products for example Agricultural Show of Kenya (ASK) and COMESA trade fairs.

KETEPA Limited exhibition at Nairobi International Trade Fair.

Publicity

Publicity is an art of making an organization popular through public awareness campaigns.It involves creating awareness of the product free of charge through the media. It may be sought for or not by the business .This implys that the seller may not have control of it. A good example of publicity is inviting the media at the launch of a new product, having press release relating to the product of the company among others.

Advantages of publicity

Publicity as a technique of sales promotion has the following advantages:

  • It involves no cost on the side of the seller.
  • It has a wide geographical coverage.
  • It may build a positive image of a business.
  • It is credible since it is reported independently without the sellers influence.
  • The community may benefits by acquiring information about the business and its product.

Disadvantages of publicity

Publicity as a technique of sales promotion has the following disadvantages

  • The seller may not have control over the message contained.
  • It is irregular and short lived.
  • The media may give false and unfavorable information about the business.
  • It has no immediate feedback

Public Relations

Public relations as a technique of product promotion refers to the process of communicating information of an organization products, policies and actions to specific consumer groups or public at large. Its aim is to create awareness and positive attitudes towards the organization and its products. It can also be applied to correct misinformation and rehabilitate a spoilt image.


Advantages and Disadvantages of public relations


Advantages of public relations

The advantages of public relation include the following;

  • It is an effective way of presenting information on organizational policies and products.
  • It controls information released to consumers and the public at large.
  • An effective way of correcting any misinformation on the organization.
  • In the long term period it may encourage hesitant and new consumers to purchase the organizations products.

Disadvantages of public relations

The following are the disadvantages of public relations as a method of product promotion;

  • If is expensive for it requires careful planning of both time and funds.
  • Its effects may take time to be realized.
  • It may be difficult to measure the effectiveness of the information because consumers are not required to respond.
  • It requires to be done by specialized of informed personnel

Choice of a Product Promotion


Choice of a Product Promotion

Many businesses choose a suitable mix of the various methods of product promotion to effectively boost their sales. To make this choice the following factors should be considered;

  • Cost of the method

An organization should choose promotion method which is cost effective.

  • Nature of the product

Heavy machineries and electronics can be promoted in trade fairs and exhibition because they require demonstration while insurance services are best promoted through personal selling.

  • Target group

An organization should choose a method that will reach the intended target group. For example when promoting products needed by babies it is appropriate to advertise through the Parents magazine.

  • Geographical coverage

When promoting a product whose potential customers is the whole country then advertising through radio and daily newspapers would be appropriate.

  • Duration

This implies the period the business wants the promotion to be in place.For long term promotion, public relations can be used and for a short term promotion, advertising can be used.

  • Physical characteristics of the media

A media with a combination of various characteristics such as verbal, visual, color, motion and written words would more appealing.



Trends in Product Promotion

In todays fast changing world, many changes are taking place in terms of both products sold and the manner in which these products are promoted. Some of the trends in product promotion include:

  • Increased use of internet to promote products
  • Increased use of electronic bill boards to promote products
  • Increased use of prize competitions
  • Increased use of mass media
  • Strengthening of the public relations functions and customer care
  • Diversification of promotional activities

Trends in Product Promotion
In todays fast changing world, many changes are taking place in terms of both products sold and the manner in which these products are promoted. Some of the trend in product promotion includes;


    • Increased use of internet to promote products
    • Increased use of electronic bill boards to promote products.
    • Increased  use of prize competitions
    • Increased use of mass media
    • Strengthening  of the public relations functions
    • Diversification of promotional activities

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