Instructions for Section 3

Questions to revise for:

How does the Size of the Enterprise impact on the choice of promotions used?

What does Budgetary Constraint mean?

How does the Budgetary Constraints impact on the choice of promotions used?

How does the ‘Appropriate for the product or service’ impact on the choice of promotions used?

What doe Target Market mean?

How does the Target Market impact on the choice of promotions used?

You will be asked the questions on the right at the end of this Learning Aim.

You need to work through this presentation and make revision notes (do these in any format that you prefer), to enable you to be able to answer these questions.

The activities throughout the presentation are there to help you apply the knowledge to real enterprises and examples.

Factors influencing the choice

of promotion

There area number of factors that an enterprise has to take into account when deciding what promotions to use. These are:

Size of the enterprise

Budgetary Constraints

Appropriateness for the product or service

Target Market

Size of Enterprise

Size of enterprise

This will affect: Size and location of the target market e.g. local or

national

Amount of finance available to spend on promotion

Whether or not there is a specialist team responsible for promotion

Expertise of employees

Type and range of promotional methods used

Frequency of promotions

Budgetary Constraints

A promotional budget is a set amount of money an enterprise allocates to spend on promotional activities in a given time period

A constraint is a limit to this amount of money that therefore limits the promotional methods the enterprise can use

For small enterprises this may be very limited, affecting their choice of promotional mix

For large enterprises this may be millions or billions of pounds (often the budget is set as a % of revenue)

The size of the promotional budget is a major influence on the promotional mix. Some activities e.g. advertising in the media or celebrity sponsorship are very expensive whilst other activities such as blogs or social media are free

Appropriateness of product or service

The type of product that a business sells will affect its use of the promotional mix, for example:

Business To Consumers (B2C) where enterprises sell to the general public the type of media used to

promote the product will reflect this. Television, radio and newspapers might be used by an expanding business targeting the whole country however a small local business would choose more local advertising. They may use market segmentation to target specific groups of customers.

Business To Business (B2B) where enterprises sell between each other we are more likely to see

direct marketing with businesses targeting other businesses with specialist information giving greater insight and detail of the product being sold. There will be greater use of informative, rather than persuasive, advertising.

Target Market

A promotion will only be effective if it reaches the correct people

Different segments will be reached through different mediums For example, what papers are read, TV programmes or

films watched, radio stations listened to

Different target markets will be influenced by different methods For example, if price is important a coupon would be

effective or is the customer influenced by the behaviour of an enterprise and therefore would see PR as a good thing

Task 1

Explain why these are the most relevant to Givenchy’s advertising

Givenchy is a high class brand that operates in the fashion and cosmetic

industry. It tends to advertise in magazines such as Vogue and

Cosmopolitan.

Identify two factors that will influence this choice of promotional method.

• Nature of product

• Limited budget

• Target market

• Nature of service

• Small scale enterprise

Task 2

Kirstie and Tom are planning to set up "Green Fingers" a landscape gardening

business. They only have a very small promotional budget.

Which two of the following would be the most appropriate promotional method?

• Leaflets through letter boxes

• Garden design starting from £499

• Advertise on TV

• Name, logo and phone number on the side of their van

• Full page advert in Home & Garden magazine

• Buy one garden landscape and get a second one free

Explain why these are the most appropriate methods of promotion for Green Fingers.