4.3.4 - Promotion, technology and brands

Advertising and sponsorship

An effective promotion reaches the intended market segment with a message that matters to those customers.

Promotion may create awareness of a new product, encourage trial, increase sales or reinforce customer loyalty. The message, method and timing should suit the segment. An illustrative small evening-language school targeting local workers could advertise convenient after-work classes in local media. A large international luggage business targeting frequent travellers could advertise durability through media those travellers use. A message reaching many people is wasteful if few are likely customers.

Advertising gives a business considerable control over its chosen message and can reach a wide audience. However, media space and creative work cost money, customers may ignore the message, and exposure does not guarantee purchases. A small business must compare the cost with its budget and realistic local reach. A large business may use wider media to maintain awareness across markets, adapting the message where customer preferences differ.

Sponsorship involves supporting an event, person, team or activity in return for association and promotional exposure. A small pet shop could sponsor a local dog show to reach pet owners. A large sportswear business could sponsor a major competition to link its brand with sport. The fit matters: the audience and values of the sponsored activity should support the intended image. Sponsorship can build awareness and favourable associations, but its cost and the event's reputation create risks. Negative publicity about the sponsored person or event can affect the sponsor, while customers may remember the event but overlook the sponsor's products.

Choose a method using the objective, segment, budget, product and likely response. A high audience count alone is insufficient evidence of success; enquiries, trial, purchases or repeat business are closer to the objective, although other influences can also affect them.

Product trials and special offers

Trials and special offers can reduce the immediate barriers that prevent a customer from making a purchase.

Product trials let customers sample or use a product before committing to a purchase. An illustrative small food shop could offer tastes of an unfamiliar sauce. Customers discover whether they like the flavour, reducing the risk they associate with buying a whole bottle. A large software business could offer temporary access to a service so users can experience its features. A trial can encourage buying if the product performs well, but samples, delivery or free usage cost money, and some people use the trial without becoming paying customers.

Trial as promotion gives potential buyers experience of an available product. Test marketing is research into market response before a wider launch. A business activity can provide both learning and promotion, but the purpose asked about determines the relevant reasoning.

Special offers give a temporary incentive, such as a discount, coupon, extra quantity or a multi-buy deal. An illustrative small café might offer a lower-priced breakfast bundle to encourage visits during a quiet morning period. A large toiletries business might use a supermarket coupon to encourage customers to try a new product. The incentive can make a purchase more attractive, but the business gives up revenue or incurs extra costs and customers may wait for future offers.

Suitability varies by segment. A price-sensitive customer may value a discount, while a customer unsure of quality may respond better to a trial. Repeated price offers may weaken the image of an exclusive product. An offer that attracts many orders is also unhelpful if the business lacks capacity and service deteriorates. Judge the extra demand against the incentive's cost and whether customers return after it ends.

Above and below the line

Above-the-line and below-the-line describe different approaches to reaching customers rather than different levels of product quality.

A large international household-goods business might use a television campaign to make a product familiar to a wide population. This can support mass-market awareness, but many viewers may not be interested, and production and media costs can be substantial. A small local music shop could instead send a discount voucher to existing customers interested in guitar equipment. Fewer people are reached, yet a larger proportion may be relevant buyers and responses can be tracked through redeemed vouchers.

Neither approach is automatically better. Broad awareness may matter for a widely sold new product, while direct contact may suit a small budget or a precisely identified segment. Below-the-line methods still cost money, and a poorly selected mailing list can be ineffective. Above-the-line advertising can use media chosen for a particular audience, so broad reach does not mean no targeting at all.

Digital promotion makes the boundary less clear. A broad online advertising campaign and a personalised email use electronic media but reach customers differently. Do not equate all online promotion with one category. Describe the method and how it reaches the audience before applying the traditional distinction. Businesses can combine broad advertising with targeted trials or offers so that awareness is followed by a reason to buy.