Edexcel A2 Business 1.3.2 Branding and Promotion PDF

Edexcel A2 Business 1.3.2 Branding and Promotion Revisionstation  Theme 1 Retrieval Challenge Matrix 1 point 2 points 3 points Define the term Name all 3 parts of the Explain the ‘ethical sourcing’ design mix importance of primary...

Edexcel A2 Business 1.3.2 Branding and Promotion Revisionstation  Theme 1 Retrieval Challenge Matrix 1 point 2 points 3 points Define the term Name all 3 parts of the Explain the ‘ethical sourcing’ design mix importance of primary market research to quantify likely demand Give the formula for Compare mass and Explain the purpose of PED niche markets product differentiation in the perfume market Give the formula for Compare market Explain how concern YED orientation and over resource product orientation depletion will change elements of the design mix You will need worksheet 1.3.2 for this lesson From Edexcel a) Types of promotion b) Types of branding c) The benefits of strong branding: added value ability to charge premium prices reduced price elasticity of demand d) Ways to build a brand unique selling points (USPs)/differentiation advertising sponsorship the use of social media e) Changes in branding and promotion to reflect social trends: viral marketing social media emotional branding Starter Are you interested in buying any of these products? Have a look at the next slide too… Starter How about these? Starter Discussion Do all products have the same customers? How many ways can you think to segment customers? e.g. Age Does the type of customer affect the way we “speak” to them through marketing? Definition: Promotion The use of marketing tools to bring a product or service to the attention of potential buyers Types of promotion Types of promotion introduction There are many different types of promotion that a business can use to raise awareness of their products and services. These are the main ways that your exam board would like you to know about and to be able to apply to a given case study: 1. Personal selling 2. Direct marketing 3. Above-the-line marketing 4. Below-the-line marketing 5. Public Relations (PR) 6. Sponsorship #1 Personal selling Personal selling is an effective way to manage business to customer relationships The sales person acts on behalf of the organisation and is useful to customers as a technical advisor Sales people are well trained in the approaches and techniques of personal selling However, sales people are Can you name 3 products that would need very expensive in terms of personal selling? salary, training, commission #1 Personal selling - salesmen For example salesmen and saleswomen are often used to sell cars or home improvements where the profit margin is high Salespeople are useful where the product comes Examples of extra packs for a Range Rover. Why would a range Rover need personal with a range of features selling? which need to be explained or “upsold” e.g. a cold climate convenience pack on a #2 Direct marketing Your Highly focussed targeted mail based on what customers have bought before Can be e-mail or by post May be special offers to re- engage customers who have stopped buying Carefully tailored to items that customers have bought before e.g. holidays, hotels, travel deals etc. Have you had any direct marketing emails How does Groupon personalise this deal? recently? #3 Above the line advertising (ATL) Above-the-line (ATL) TV adverts marketing involves mass media methods for targeting larger and more general customers Radio TV Cinema Print adverts e.g. in Radio adverts newspapers and major magazines Outside adverts e.g. billboards Newspaper adverts #3 Above-the-line advantages and disadvantages Advantages Disadvantages ATL is tailored to reach a mass ATL is a very expensive audience and get maximum method of advertising.g. A exposure to potential radio ad on a national station customers can cost about £10,000 for a week Advert communication is It is difficult to measure clear repeated so the message is results from advertising clear e.g. “simples” and “go campaigns, how will they compare” know which customers have Great for building brand bought because of seeing or hearing the advert? awareness #4 Below the line Advertising Below-the-line (BTL) Leaflets / flyers marketing is the same as Posters direct marketing for Local Radio advert reaching smaller but more Billboard targeted audiences Web Site banners and pop-ups The main methods Local newspaper adverts include: Taxi sides Public relations e.g. Magazines Ryanair PR stunts Brochures Search engines Local Magazines Events e.g. restaurant YouTube launch Facebook Social media marketing Smartphone apps #4 Below-the-line advantages and disadvantages Advantages Disadvantages Easy to measure if the campaign Extensive training on working has reached an audience e.g. social media and IT may be through number of website visits, needed for marketing staff conversion rates, click through rates Deeper understanding of Easy and inexpensive to use customer or buyer behaviour social media to increase brand is required e.g. what do they awareness read, what websites do they visit BTL is more targeted to specific niche segments rather than Targeting diverse cultures with aiming at the whole mass market the same theme is difficult #5 Public Relations Public relations is also known as PR PR aims to build a relationship between the business and the public, to create a favourable corporate image PR is unpaid communication about an Watch the video and at the end see if you organisation which can explain what a publicity stunt is to another member of the class. appears in mass media PR can include publicity #5 Public relations long-term PR is a long-term not a short-term strategy PR is very low expenditure –e.g. a business could send its products to the local paper for a “review” PR gives the business less control over what is said BUT consumers find it more believable / authentic #6 Sponsorship Positive association of the product with a celebrity or a sport Can be very expensive e.g. £125m Difficult to tell what impact this has on brand loyalty or sales Sales promotions Sales promotions introduction There are lots of different types of sales promotions. These are the six that the exam board would like you to know and be able to discuss. Get ready to make some notes about these on the next few slides. 1. BOGOFF 2. Price discounts 3. Money off coupons 4. Samples / giveaways 5. Special events 6. Point of sale #1 BOGOF BOGOF stands for buy one get one free In a BOGOF sales promotion a business offers one item free when another one is bought Used to encourage customers to go into the shop or buy the item Advantages Disadvantages  Very popular with shoppers  Loss of profit because there is an increase in  Encourages trial and use of the product costs, this will not be balanced by the  Good way to encourage shoppers to increase in sales switch from their normal brand  Only useful in the short-term  Boosts sales, therefore sales revenue will increase #2 Price discounts Price discounts means that the normal RRP (recommended retail price) of the product or service has been reduced Advantages Disadvantages  Great way to clear old or out-of-date  Customers may regard the business as a stock cheap option  Too many discounts and customers become suspicious e.g. the DFS sale that is always on 3. Money off coupons Coupons can be used to capture new customers, as it adds an incentive to buy (often with a time limit) Coupons can also be used with existing customers to encourage repeat purchases Advantages Disadvantages  Coupons can help the customer feel  Reduced profits from the cost of running they are getting better value for money the promotion  Coupons are available from websites,  Some customers may be waiting for the loyalty cards, store magazines and on coupons before they purchase the back of some packs to encourage  Customers may have been wanting to repeat purchase make a purchase anyway 4. Samples / giveaways This is where a business may send out or give customers free samples in order to persuade them to try the product for the first time Giveaways may occur on the front of a magazine Advantages Disadvantages  Ideal for new product launches  Can be complicated to send in the post –  Works especially well with some needs a database of customers products e.g. shampoo, food etc.  Can be expensive as giving away some of  Encourages word-of-mouth promotion the product for free 5. Special events Special events are activities that the business does to encourage consumers to try the product Events can be; shows, fetes, fairs, or an events at the business e.g. a special tasting evening at a restaurant Advantages Disadvantages  Encourages customers  Can be expensive to attend  Hard to measure how  Rewards loyal valuable this marketing customers with a is special event  Ideal for small 6. Point of sale Point of sale display is usually a cardboard display stand located close to the till within a shop This is to draw customer attention and trigger an “impulse” purchase Advantages Disadvantages  Ideal way to promote new products  Only successful if the product meets the  Works best with products that have an needs of the customer event or holiday tie in e.g. crème eggs  Needs to be designed and out to stores in for Easter time for the event / holiday  Manufacturers can add extra punch to  Displays may be put in poor locations by the promotion by giving a discount shops e.g. next to a broken till or one that is rarely opened Digital communications introduction There are lots of different types of digital communications used to promote products and services. These are the six that the exam board would like you to know and be able to discuss. Get ready to make some notes about these on the next few slides. 1. Online adverts 2. Mobile communications 3. “Advergaming” 4. Social media 5. Consumer generated content 6. Viral strategies #1 Online adverts Online adverts include: banner and commercial classified adverts - including adverts within emails pop-up adverts paid-for search listings paid-for listings on price comparison sites Advantages Disadvantages  Powerful ad management tools  Customers may ignore the ads can deliver accurate data and  Ads may get lost amongst all the statistics about effectiveness of content and other ads the adverts  Click through ads can be  Potential to reach large markets expensive of customers shopping online #2 Mobile communications Mobile communications includes smartphones, androids, tablets and other devices used on the go Adverts may appear as text messages e.g. from O2 Adverts may also appear in apps Advantages Disadvantages  Mobile marketing can be used to extend Small screen the message may be lost or the online reach so that customers can distorted interact with the brand whilst on the Security issues of conducting transactions move online  Doing m-commerce transactions do not Websites now need to be adapted to be require the users to plug in a computer mobile friendly which can be an expensive or wait for the laptop to load process #3 “Advergaming” An advergame is a video game which contains an advert for a product, service or business It may also be a corporate website that contains a game which is designed to attract customers For example in a car racing game the cars may pass billboards which are genuine adverts Advantages  Customers will be concentrating on the  If the game and the brand don’t make game so are more likely to concentrate sense together the message is lost – on the brand message wrongly targeting a game with car adverts  Many games are multi-player reaching for example huge audiences  Many games are played by consumers too  Many consumers except that there will young to make a purchase decision be adverts in games #4 Social media Social media advertising is free or low cost so very cost effective All brands now need a web presence and can do this with social media marketing This is also called digital marketing Advantages Disadvantages  Customers can be kept informed of new Blogs, twitter, Facebook pages all need to products be updated on a regular basis which  Increases customer engagement with means hiring committed staff – which is the brand an additional cost  Can show customer service with a quick response #5 Consumer generated content This means any form of content such as video, blogs, discussion forum posts, digital images, audio files, and other forms of media that was created by consumers Content has been made available to other consumers online Advantages Disadvantages  Opportunities for consumers to read Consumers have lots of ways of publicly reviews before they make the purchase complaining about a product or service e.g. Trip Advisor Not just about brands anymore, now  Positive responses to complaints can be about online reputation, which could be very valuable marketing and reputation expensive to manage (hire staff) enhancement for the business #6 Viral strategies Viral marketing describes any strategy that encourages customers to pass on a marketing message to others, creating the potential for exponential growth in the message’s exposure and influence. Like viruses, such strategies take advantage of rapid multiplication to explode the message to thousands, to millions Advantages Disadvantages  Consumers spread the message  Can be so complex that the original amongst themselves which reduces message is lost costs and also increase authenticity of  Still new idea so hard to get funding for the brand message as it is endorsed by this kind of campaign from some of the a friend more traditional companies Types of branding Definition: Branding A brand is a characteristic name or symbol that distinguishes one product from another supplier Brands introduction The first impression of a business is likely to be the logo, which is important when the customer if forming early opinions The best designs are simple, attractive and memorable Can you draw the Nike swoosh, McDonald’s golden arches and Apple logo from Manufacturer / corporate branding Corporate branding aims to build communications and relationships between the main business name and the customers The business may itself own a range of brands e.g. Nestle and Kitkat Why would a business use a slogan? E.g. Just do it Manufacturer / corporate branding Spreads the cost of marketing across all the individual brands Awareness of the company can be worldwide e.g. Coca cola Takes a long time to build a solid brand image Any unfavourable incidents e.g. a product recall and the whole brand suffers Too much advertising exposure can cause indifference towards the brand Product branding A product branding strategy will aim to show the customer the features and benefits of a product which will differentiate it from other similar products in the marketplace This may include colour: Kitkat is __________ Galaxy is ____________ Dairy milk is ___________ Product branding Branded products can command higher prices that non-branded Businesses therefore can expect higher profits from branded cash cows Good branding differentiates the product and creates customer loyalty Product branding may require a high investment Product branding may take many years to build up Limited flexibility when the product tries to develop new lines in the range beyond what they are known for Own brand products Own brand or own label products are made by a manufacturer on behalf of a supermarket In ASDA the range is called _______________ In Sainsbury's it is called _______________ In TESCO it is called ________________ Own brand products Boosts customer loyalty to the supermarket Competes with manufacturers brands Store brands are a mixed bag and can Fills gaps left by the competition be made by numerous companies under the supermarket’s name, so ketchup might be great but cornflakes might taste like carpet tiles Research Rebranding Rebranding is a marketing strategy in which a new: Name Symbol Term Design Or combination of the above Rebranding works best on established brands with the intention of developing a new differentiated identity in the minds of consumers Carry out some research and find out why Coco Pops rebranded as Cocoa Krispies and what the product is called today Rebranding example – old spice 2010 Old Spice a men’s body care range wanted to change from their traditional older customer to a new younger customer image Now watch this ad too HERE The benefits of strong branding Added value A strong brand can add value to a product both for the consumer and for the business The kudos of having an apple iWatch for example The benefit for a business of added value is that this increases the value of the overall business making it more attractive to investors. Can a brand become a valuable asset? Ability to charge premium prices Some brands become Brandnomers – how many of household names or these are a brand name? brandnomers, for example A. B. Chapstick Sellotape have you ever said “I’m C. Sharpie going to Hoover the house”, D. Jacuzzi a Hoover is a brand name, E. Velcro you are vacuuming the F. Jet ski house. G. Bubble wrap H. Onesie Consumers associate these I. Band-Aid brandnomers with J. Post-it consistent quality and K. Tarmac therefore will pay a higher L. Pritt stick price for them than a non-  a ke w ill m a n d e w ill Reduced PED k n n r b e pr ds i o mor r wor w ell oduct othe i c t w A e pr in D c th lasti he PE – PED stands for price elasticity i n e u ce t e d a re ob of demand r i f youities H £1.50, PED measures the m p l e M cV p a y e e x a for w i l l is th u responsiveness of demand to Foropping n youif that hat yoto a change in price sh bs the2.50 rand t ikely PED can be either elastic or No.00, £ and b e unl brand £2 duct will bferior inelastic pro nt your an in Products / services that have wa tle fo elastic demand are responsive set to a change in price, this means if the business puts prices up, then demand will fall Ways to build a brand USP’s / Differentiation USP stands for unique selling point – these are the small details that makes one product or business different from another These USPs can be exploited to build the brand For example Amigo loans which lends to customers who can provide a guarantor who may have had problems getting a loan elsewhere Advertising Brand awareness is a sense of loyalty between the customer and the advertiser Customers purchase from brands they are familiar with In a supersaturated global market place consumers see 100’s of adverts every day To build a brand a business will need to use a mixed media approach e.g. print (newspapers) and digital (YouTube adverts) Sponsorship Association with a celebrity or sports star can result in increased brand recognition, awareness and perception Snoop dog ______________ Dj Kalid __________________ Ronaldo_______________ Kanye________________ Social media Another way to help build a brand is to engage with customers (followers) on social media channels Twitter can help build trust through engagement and interaction with customers A business looking to build a brand this way should look at what content their competitors are sharing and find out where their customers are online What businesses do you follow on Twitter? Changes in branding and promotion to reflect social trends Viral marketing Viral marketing is a method of marketing whereby consumers are encouraged to share information about a company's goods or services via the Internet. This is a sales technique which relies on word-of- mouth information about a product or a service to spread at a rapid rate, in the form of shares, likes and forwards Social Media Social media can be used to build a brand Facebook, snapchat and Instagram are all popular social media sites that can help to build and promote products Sites can be used to show features and benefits of products which helps to differentiate itself from the competition Emotional branding Emotional branding seeks to create a bond between the consumer and the product by provoking an emotional response to the advertising Long lasting attachment to a product is a strong brand loyalty Watch the John Lewis Christmas advert – what kind of emotional response might customers have to watching it? Plenary Quiz Identify if these terms are about brands or about promotions 1. Personal selling brand / promotion 2. Manufacturer or corporate brand / promotion 3. Direct marketing brand / promotion 4. Product brand / promotion 5. Above-the-line marketing brand / promotion 6. Own label brand / promotion 7. Below-the-line marketing brand / promotion 8. Rebranding brand / promotion 9. Public Relations (PR) brand / promotion 10. Sponsorship brand / promotion Plenary Quiz Answers 1. Personal selling promotion 2. Manufacturer or corporate brand 3. Direct marketing promotion 4. Product brand 5. Above-the-line marketing promotion 6. Own label brand 7. Below-the-line marketing promotion 8. Rebranding brand 9. Public Relations (PR) promotion 10. Sponsorship promotion Sample Edexcel A2 questions Case study for question 1  Sample question 1 Evaluatio Knowledg Applicati Analysis n e4 on 4 6 6 Business terminology to use in your answer Differentiation Consumer recognition Barriers to entry Price elasticity of demand Strong brand Marketing mix Distribution channel (place) Answer sample question 1  Peer / self marking grid for 20 mark question Mark 1-4 marks Limited knowledge and some recall of business theory, answer may not be in context What went well: You used business terms correctly Even better if: You had discussed the business context given in the case study 5-8 marks Comments are in context, and chains of reason are present but very basic. Unbalanced argument, only discusses one side. What went well: You were able to give chains of reason in context in your answer Even better if: You had given both sides of the argument 9-14 marks Chains of reason are complete and argument shows both sides. Answer is in context, and comparisons between the two options will have been attempted, which may lead to a conclusion What went well: Your analysis was shown in your chains of reason Even better if: You had given a recommendation or proposed a solution 15-20 marks Accurate understanding and knowledge. Logical chains of reason, balanced and fully developed arguments weighing up both sides of each options. All in context leading to a supported judgement, and a conclusion that proposes a solution or recommendation What went well: You had logical chains of reason showing cause and effect Case study for question 2  Sample question 2 Evaluatio Knowledg Applicati Analysis n e2 on 2 2 2 Answer sample question 2 Peer / self marking grid for 8 mark question Mark 1-2 marks Limited knowledge and some recall of business theory, answer may not be in context What went well: You used business terms correctly Even better if: You had discussed the business situation in the case study 3-5 marks Comments are in context, and chains of reason are present but very basic. Unbalanced argument, only discusses one side. What went well: You were able to give chains of reason in context in your answer Even better if: You had given both sides of the argument 6-8 marks Chains of reason are complete and argument shows both sides. Answer is in context and uses numerical data to support where appropriate. What went well: You gave a balanced argument in your answer Even better if: You had used more numerical data to support your arguments Case study for question 3 Sample question 3 Knowled Analysi Evaluati Applicati ge 2 s on on 2 2 2 Answer sample questio n3 Peer / self marking grid for 8 mark question Mark 1-2 marks Limited knowledge and some recall of business theory, answer may not be in context What went well: You used business terms correctly Even better if: You had discussed the business situation in the case study 3-5 marks Comments are in context, and chains of reason are present but very basic. Unbalanced argument, only discusses one side. What went well: You were able to give chains of reason in context in your answer Even better if: You had given both sides of the argument 6-8 marks Chains of reason are complete and argument shows both sides. Answer is in context and uses numerical data to support where appropriate. What went well: You gave a balanced argument in your answer Even better if: You had used more numerical data to support your arguments Case study for question 4 Sample question 4 Knowledge Applicatio Analysis Evaluati n on 4 6 4 6 Answer sample question 4 1/3 Answer sample question 4 2/3 Answer sample question 4 3/3  Peer / self marking grid for 20 mark question Mark 1-4 marks Limited knowledge and some recall of business theory, answer may not be in context What went well: You used business terms correctly Even better if: You had discussed the business context given in the case study 5-8 marks Comments are in context, and chains of reason are present but very basic. Unbalanced argument, only discusses one side. What went well: You were able to give chains of reason in context in your answer Even better if: You had given both sides of the argument 9-14 marks Chains of reason are complete and argument shows both sides. Answer is in context, and comparisons between the two options will have been attempted, which may lead to a conclusion What went well: Your analysis was shown in your chains of reason Even better if: You had given a recommendation or proposed a solution 15-20 marks Accurate understanding and knowledge. Logical chains of reason, balanced and fully developed arguments weighing up both sides of each options. All in context leading to a supported judgement, and a conclusion that proposes a solution or recommendation What went well: You had logical chains of reason showing cause and effect Key terms Differentiation; How well a business can change the product so that a consumer recognises it as superior e.g. Audi / BMW German technology engines Consumer recognition; How well a business knows their customers, age, gender, lifestyle etc. Barriers to entry; How difficult is it to get into the market, e.g. Mobile phone market high technology so high barriers to entry, market stalls, easy to start so low barriers Price elasticity of demand; How much demand for a good or service is likely to fluctuate with a change in price e.g. petrol will still be demanded no matter what the price is, therefore it is inelastic in that demand doesn’t change by much with a price increase Strong brand; A brand that is recognised by everyone, e.g. Rolls Royce, Rolex, Ford, Chanel Marketing mix; Price, place, promotion and product, how a business uses these 4 elements strategically Distribution channel (place); Where a product is sold and how many stages it takes to get to a customer e.g. factory outlet = 2 stages: manufacturer > customer