Promotion

Promotion is the part of the marketing mix that communicates with customers. It raises awareness of a product or business, persuades people to buy and reminds existing customers to return.

Promotion has several aims. It can inform potential customers that a product exists and what it does, and encourage trial and purchase, especially when a product is new or unfamiliar. It can build brand image so customers see the business as trustworthy or appealing, and remind existing customers why they bought before. Good promotion can therefore support sales and help a business grow its market share.

Not only advertising

Advertising is one promotional method, but promotion is wider. A business may also use sponsorship, product trials, special offers and branding. These methods work in different ways: some give customers a reason to try a product, some build recognition, and some keep the business visible.

Using a mix

Businesses often use a mix of promotional methods rather than relying on one. Different segments use different media and respond to different messages, so a mix helps the message reach more of the right customers. Repeating the same message across several methods can also reinforce it. For example, a new indoor climbing centre might offer a free first climb to attract beginners, sponsor a local school sports award to build trust, and use posters and social posts with the same slogan so people see the same message more than once.

A market segment is a group of customers with similar characteristics or needs. Customers in one segment may share an age range, income level, hobby or location. Promotion should be aimed at the segment a business wants to serve, not at “everyone”, because different groups notice and trust different messages.

Choose promotion that fits the segment’s media habits: where they read, watch or scroll. Their income affects whether a money-off offer feels useful or cheapens the product. Their lifestyle and location affect the tone and reach of the campaign, while the product type affects whether a trial, a special offer or a brand-building message makes more sense. The promotion budget limits which methods are realistic, and the desired brand image must match how the segment sees the business. A premium image can be damaged by constant discounting, for example.

The same promotional method is not equally effective for every segment. A method can appeal strongly to one group and alienate another. A local climbing gym launching beginner sessions for students might use short videos on the social platforms those students use, plus a student discount. The same gym would waste money advertising in a retirement magazine or sponsoring an over-60s bowls league, even though both could work for a different business.

Advertising is paid communication through media to reach a target audience. The business buys space or time, such as a poster site or an online video slot, so it decides the message, but it cannot fully control who sees the advert.

Advertising can do four jobs: raise awareness so that people know a product exists, give information such as features or opening times, persuade customers that it is worth buying, and remind existing customers to buy again. For example, a new indoor climbing centre could advertise on a local radio station to tell families it has opened, describe its beginner sessions and encourage listeners to book a first visit.

Benefits and drawbacks

Its big strength is reach: one campaign can put a message in front of a wide audience quickly. However, advertising can be expensive, and a medium can reach many people who are not in the target segment, so money is wasted on people who would never buy. It is also only one promotional method, not the whole of promotion.

Choosing a suitable medium

Advertising is more appropriate when the chosen medium is used by the target segment and the message fits the brand. A brand selling phone cases to teenagers gets more value from a gaming video channel than from a retirement magazine, because the audience matches. The medium must match the audience's habits and the brand's identity, so the right advert reaches the right people with a message they understand.

Sponsorship is when a business pays to support an event, person or team in return for promotion of its name or brand. The sponsored activity might be a local sports club, a school competition or a music festival. In return, the business usually gets its logo on kit, signs or programmes, and may be mentioned in announcements.

Why businesses sponsor

Sponsorship can raise awareness by putting a brand in front of the people who attend or follow the activity. It can also associate the business with that activity's values, such as health, teamwork or creativity. If customers trust the event or team, some of that trust may pass to the sponsor, which can build credibility. Sponsorship also lets a business reach a particular audience - for example, a skateboard shop sponsoring a youth skate contest gets its name in front of young skaters and their families, who are likely customers.

A commercial arrangement

Sponsorship is not a donation. A donation is given without expecting publicity, whereas sponsorship is a commercial arrangement in which the business expects something back, such as logo space, announcements or tickets to give to customers. The business should therefore judge whether the publicity it receives is worth the money it pays.

Costs and risks

Sponsorship can be expensive, especially for large events, and the publicity may not lead to enough extra sales to cover the cost. There is also a risk if the association is unsuitable or unpopular. Imagine a family bakery sponsors a motocross team whose riders are known for dangerous stunts. If local parents think the sport is too risky, the bakery's family-friendly image could suffer. A good fit between the brand and the activity matters, because customers notice who a business chooses to support.

Product trials let customers try a product before they buy it. Businesses use samples (small free amounts), demonstrations (showing the product in use) and testers (products set out in store that customers can handle or try).

Trials work because they reduce customer risk: if you are unsure whether a product suits you, trying it first makes a bad purchase less likely. Lower risk can encourage a first purchase. A trial also gives the business feedback before and after launch, and customers who like the product may tell others, creating word-of-mouth promotion.

Example: a garden centre launches a new hedge trimmer. On a Saturday, staff run a demonstration and let shoppers hold the trimmer and cut a branch. Some shoppers who were worried about the weight buy one. Comments about the handle help the garden centre improve its next batch, and buyers mention it to neighbours.

Trials can be costly: free samples use up stock, demonstrations need staff time and space, and testers can be damaged or stolen. They may not suit every product, either. A product that is used up in one go, such as a firework, cannot really be tried first, and a very expensive item cannot be given away free, so a demonstration may be the only option.

Businesses use trials for new products, to build confidence at launch, or to tempt customers away from a rival. A soft drinks brand might hand out free cups at a festival to win customers from the brand they usually buy.

Special offers are short-term incentives that give customers a better deal for a limited time. They can be a price reduction, such as £6 off a rucksack, or extra product for the same price, such as a free bag of popcorn with every cinema ticket bought this weekend.

Why businesses use them

They can encourage trial because a lower price or free extra makes customers more willing to try a product. They can also increase short-term sales, clear old stock before new products arrive and attract price-sensitive customers who compare deals carefully. For example, you might see a garden centre take 15% off every garden bench and patio set in the last week of September to clear space for Christmas stock and attract bargain hunters.

Drawbacks

A price reduction means each sale brings in less revenue per unit (the money received for each item sold). A free extra means the business gives more for the same money, so costs per sale rise. Either way, the business needs enough extra sales to make the offer worthwhile. Frequent discounts can damage a premium image — a reputation for high quality and high price — because customers may question the value or wait for the next deal. Rivals can also copy an offer quickly, so any advantage may be brief.

Keep them short-term

Special offers work best as short, planned incentives. If a business runs them for too long, you may start to expect discounts all the time and refuse to pay the normal price. That can reduce brand value and make future full-price sales harder. A limited weekend offer can create urgency; a permanent discount can become the normal price in customers' minds.

Branding is creating a distinctive identity for a product or business through its name, logo, design and image. It is how customers recognise the business and what they expect from it.

What branding includes

A brand is more than a logo. It covers the name, colours, packaging, tone of voice and the reputation customers connect with the product. For example, Puffin Trail sells recycled outdoor jackets. Its name, puffin-footprint logo, earthy colours and promise of durable kit all create one clear identity. When you see the puffin footprint, you know the jacket is from Puffin Trail and what it stands for.

Why strong branding helps

Strong branding can build recognition, so customers spot the product quickly, and trust, because a familiar brand feels reliable. It can create loyalty, encouraging repeat purchases, and differentiation, making the product stand out from rivals. A strong brand may also support a higher price, since customers may pay more for a name they believe in.

Branding takes time and money. A business must pay for design, packaging, consistent promotion and protecting its image. It can also be damaged by poor promotion or bad publicity. If Puffin Trail made exaggerated environmental claims in an advert, customers could lose trust and loyalty.

Branding is not advertising

Branding creates identity and reputation, while advertising communicates messages to customers. Advertising can help build a brand, but the brand itself is the overall identity customers know and judge.

Technology in promotion means using digital tools such as websites, social media, apps, search engines and email to communicate with customers. It has widened the ways a business can promote, because a message can be put online and seen by customers far beyond a local shop or a single advert.

Reaching customers online

Online promotion can reach customers where they already spend time, often on phones and tablets. A small business no longer needs a huge budget for a national television advert to be noticed by customers in other towns. It might post a short video, run an online advert, publish a webpage or send an email to people who have signed up. These methods add to older ones, such as sponsorship or special offers; they do not replace them.

• A local dance school posts clips of classes on social media, so new students can see what lessons are like.
• An online game shop puts a trailer on its website and shares it through its app, reaching players who rarely watch television.

Using customer response data

Digital promotion can automatically collect customer response data: how many people viewed a post, clicked a link, opened an email, shared a video or used a discount code. This shows which messages and channels are working. The business can then adjust the campaign, for example by changing the wording, moving budget to the best channel, or sending a follow-up offer. This is more precise than a poster or newspaper advert, where it is harder to tell who responded.

Worked example: A skateboard shop promotes a new backpack with a social media video and a banner on its own website. The video gets 5,000 views but only 40 clicks. The banner gets 300 clicks and its discount code is used 60 times. The response data shows the banner is turning more viewers into customers, so the shop adds the discount code to the video and gives the banner more space on its homepage.

Targeted online advertising uses data about what a user does online, such as the pages they read, the words they search for and the adverts or products they click, to show them adverts that match their interests. The business is aiming at a segment of customers whose behaviour suggests they are likely to buy, rather than at everyone using the internet.

For example, a shop that sells dance shoes pays a social media platform to show its advert only to users who have watched dance tutorial videos and follow dance schools, because that behaviour suggests they are likely to want the product.

How it works

• Platforms collect data as users browse, search and click, often using cookies (small files stored on a device that track activity).
• The data builds a picture of a person's interests, which the platform matches to the business's target segment.
• The business sets the advert and its budget, and the advert appears in the feeds or on the pages of users who fit that picture.

It does not reach every customer. It only reaches users whose online behaviour suggests they are in the target segment, so people with different habits may never see it.

Benefits and drawbacks

• Privacy concerns: customers may not realise their data is being collected and can feel watched, which can damage trust in the brand.
• Annoyance: if an advert follows someone across every site, or is repeated too often, they may be put off the business altogether.

Targeting usually gives a better return per pound than untargeted advertising, but only while customers accept it, so the amount and frequency of adverts matters.

Viral advertising is promotional content that spreads because users share it with others, usually through social media. The business creates a post, video or challenge that people choose to pass on, so the message travels from user to user rather than only appearing in paid space.

Why businesses try it

Viral advertising can spread quickly and reach a large audience for relatively little cost. A single post can be seen by thousands of people who do not follow the business, because their friends shared it. For a small business with a tight budget, this can build awareness that it could not afford to buy through paid advertising.

It must be worth sharing

Viral content has to be engaging enough for users to share it, such as being funny, surprising or useful. For example, an independent skateboard shop could post a short clip of staff building a ramp from scrap wood and testing it. If other skaters find it entertaining, they share it and the shop's name reaches new customers. But there is no guarantee it will spread. Viral advertising is not free either: making good content takes time and money, and if nobody shares it, the business has spent both for little reach.

E-newsletters are promotional emails sent to customers who have chosen to receive them. Customers usually sign up on a website, in a shop or when they pay for an order, so the business has their consent to contact them. This makes e-newsletters a form of permission-based promotion, unlike spam, which is sent without permission.

Why businesses use them

An e-newsletter can build a relationship by giving useful or interesting content, not only asking for a sale. For example, a small garden centre might email its members once a month with seasonal planting advice and a short video from its staff. That keeps the business in customers' minds between visits.

They can also inform customers about offers and include links straight to the online shop or a booking page. Because the content can be targeted, a customer who often buys houseplants might see different articles and offers from a customer who buys tools. The aim is to encourage a repeat purchase and build loyalty.

The results can be measured: the business can see how many emails were opened and which links were clicked. It can then change future emails to improve results.

Drawbacks

An e-newsletter can be ignored, deleted or marked as unwanted, especially if it arrives too often or the content is dull. The business must have consent and make unsubscribing easy. It also needs good content, such as useful advice, clear offers and a well-designed layout, or customers will stop opening it.

Revenue and profit

Evaluating promotion means deciding whether a campaign was worth its cost. Promotion can increase sales revenue by raising sales volume: more customers buy, so revenue rises. It can also support a higher price if it makes the product seem more desirable, so each sale brings in more revenue.

However, revenue is not profit. Promotion costs, plus any extra staff time, materials or discounts, are taken from the extra revenue. A campaign can raise sales and still reduce profit if it is expensive or ineffective.

For example, a bike repair service spends £600 on a local campaign. It gains 50 extra repairs at £25 each.

The extra revenue is £1,250, but after £450 of extra parts and mechanic time and the £600 campaign cost, profit rises by only £200. The campaign worked, but its cost swallowed most of the gain. An ineffective campaign could add less revenue than it costs, reducing profit.

Objectives and value for money

Evaluate promotion against its objectives. A campaign to launch a new service may aim to raise awareness of it; a campaign to fill a quiet month may aim to increase sales quickly. Success means meeting the objective, not just being noticed.

Value for money compares the cost of a campaign with the extra sales or profit it creates. A £2,000 campaign that adds £8,000 profit can be better value than a £400 campaign that adds £500 profit. A cheap campaign is poor value if it reaches the wrong customers; an expensive one can be good value if it produces strong, measurable results.