PRODUCT PROMOTION - KCSE BUSINESS STUDIES NOTES, SCHEMES OF WORK, OBJECTIVES, QUESTIONS AND ANSWERS

5/12/2017

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OBJECTIVES
NOTES
QUESTIONS
PRINTABLES

PRODUCT PROMOTION (12 LESSONS)
TOPIC/ SUB-TOPIC OUTLINES

Meaning of a product
Meaning and importance of product promotion
Methods of product promotion
Advantages and disadvantages of each method of product promotion
Choice of promotion method
Ethical issues in product promotion
Trends in product promotion

SPECIFIC OBJECTIVES

By the end of the topic, the learner 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 promotion method
recognize the need for ethical practices in product promotion
discuss trends in product promotion.

introduction to Product Promotion.

Product is an item or service offered to the consumers at a price. Therefore, product promotion is the communication or any activity undertaken to inform the consumers, persuade and remind them to buy the product from the market.

The purpose/Importance of product promotion

It informs the customer of the availability, price, and where to obtain the product to satisfy their wants
It persuade the buyer to buy their products a head of their competitors’ products in the market
It reminds the customers of the continued existence of a given product in the market
It educate the consumers of the usage of the product to satisfy their needs fully
It informs them on any improvement that has been made on the product
It stimulates the demand of the product being promoted in the market
It brings out the positive features of the product
It opens new market for the product in the environment

Methods of product promotion

Product promotion may be carried out in the following ways:

Personal selling
Advertising
Sales promotion
Publicity

1. Personal selling

This is a method of promotion where there is an oral presentation in the conversation with the prospective customer. It is done by with the use of salesmen who informs the prospective buyer of all the aspects of the product

Methods of personal selling

Personal selling can be carried out in the following ways;
Through sales person approaching the customers
A case where the sales person approaches the prospective customers after drawing their attention, explaining details of the product and even demonstrating how the product works in order to persuade the customer to buy.

Steps involved in personal selling through sales person

Identify prospective customers who could possibly require the product
Preparing the presentation by gathering all the possible information about the product , as well as designing an appropriate methods that he will be used to present to the customer
Establishing the customers contact, as well as choosing an appropriate time to meet the customer to be. That is the time when the customer may receive him
Arousing the consumers interest in the product by attracting his/her attention through approach and languages, as well as making the prospective customer develop interest in the product
Dealing with the objections on the product which may have been brought about by the customer to be
Closing the sale by inquiring whether the prospective customer will be interested in the product or not. This should be done in a polite manner
Offering after sale service to the customer on the product that has been sold

Shows, trade fairs and exhibitions

This is where the manufacturer of a given product gets a chance to display publicly to the prospective customer to inform them about the product. The prospective customers’ attention is then drawn to the product and more information is given to him about the product at the point where it is displayed.

Advantages of shows, trade fair and exhibitions

It gives the customer an opportunity to compare various products before making a decision on what to buy
It gives the sales person an opportunity to explain in fine details the features of the product to the prospective customers
The manufacturers of the product gets a chance to receive immediate feedback from their customers through interactions during the shows
The number of people visiting their stall to assess their products will help them determine their potential market size for the product

Disadvantages of shows, trade fairs and exhibitions

It is expensive to hire a stall for the exhibition of the product
The sales person may have to explain over and over again for the prospective customers as they may not enter into the stall at the same time
The trade fairs are not frequently organized, therefore an organization rely on it as the only means of product promotion may not succeed

Showrooms

These are large rooms where goods are displayed, especially bulky and durable goods like cars, furniture’s, etc. for the customer to see and be informed about them to stimulate their interest in them
The room allows the customer to get more information about the product from the sales person in the showroom

Advantages of showrooms

They enables the seller to get immediate feedback on the product
They enable the customers to get clarification on the product they need to purchase
It is a cheap method of production
It provides an opportunity for the usage of goods to be demonstrated
The information the prospective customer get from the show room is more reliable

Disadvantages of showrooms

They are usually located away from the town centers, making them not be accessible by many
It is expensive to hire showrooms
They require security to protect the goods inside them which may be very expensive
Some prospective customers may tamper with goods in the room while trying to operate them

Free Gifts

A gift is an item given to the customer free of charge after buying a product which it is pegged on or buying products of a given value. The gift may not necessarily be the same as the product bought, but they are meant to encourage the customer to buy more or give the customer opportunity to explore the product given as a gift.

Advantages of free gifts

It enable the customer to enjoy the product given as a gift without paying for it
It persuades the customer to buy more of the product in order to get the gift
It is an additional product, and therefore increases the customers satisfaction
It may help in creating loyalty in the product being promoted

Disadvantages of free gifts

It makes the customer buy including products they didn’t require in order to the said gift
The cost of the product may be very expensive for he customer
Some middlemen may remove the gift and keep or even sell to the customer to maximize profit

Free Sample

This is a product on trial given to the customers freely to influence their demand towards the product. It mainly used when the product is new and the customer may have not known about the existence of the product

Advantages of free sample

It enables the customer try the product before making a decision to buy it
The customer is able to enjoy the product that otherwise he may have not enjoyed
The organization is able to get immediate feedback from the customer about their new product
It enables the organization to acquire more customers for their product

Disadvantages of free sample

Some of those receiving the sample may not come back to buy
It may be an expensive method of promotion especially where many samples are to be given
Goods given for free may reduce the value of goods that may have been sold to earn profit
It is not suitable for expensive products

Circumstances under which personal selling is appropriate

When launching a new product in the market which requires a lot of awareness to the prospective customers to enable them make a choice
When a product is tailored to meet the customer’s needs, as different consumers have different needs, taste and preferences to be addressed.
When demonstration is required on how the product works, especially the technical products
When the organization has the capacity to finance the sales force carrying out the personal selling.
Where the market is concentrated within a given region that can easily be accessible by the task force.

Advantages of personal selling

It is more flexible than any other method for the marketer is able to meet the needs of different people
It enable the prospective customer to know more details about the product before making a decision
The sales person is able to demonstrate the use of the product
The seller is able to get immediate feedback on the product
The seller is able to obtain the personal contact of the prospective buyer
It gives the buyer an opportunity to negotiate the terms of purchase
It takes care of both literate and illiterate prospective customer
The seller is able to persuade the prospective buyer to buy the product

Disadvantages of personal selling

It is labour intensive and therefore very expensive when the area to be covered is wide method
It is time consuming as it involves explanation and demonstration
It may only target a particular group of people
The seller has to meet the travelling and other expenses involved which may be very expensive
Salespersons may misuse the resources allocated for them, making the target not to be achieved
The process may inconvenience the prospective buyer’s program
It may only cover a given region which may not be wide enough

1. Advertising

This is the presentation of information about a product through public media such as newspapers, radios, billboards, etc.

Types of Advertising

Product advertising: - this is a form of advertisement meant to promote a given product or a particular brand of product
Institutional advertising: - this is a form of advertisement meant to improve the image of the institution or organization and not a particular product. It is meant to create confidence in the customers about the institution
Primary demand advertising: - a form of advertisement meant to a new product that has been introduced in the market for the first time. It is mainly to create awareness of the existence of that particular product
Celebrity advertising: - a form of advertisement where a famous/popular person is used to promote a particular product. It is meant to convince those who identify themselves with that personality to buy the product
Informative advertising: - a form of advertisement meant to give the customer more information about the product to enable them make an informed decision
Competitive/persuasive advertising: - a form of advertisement carried out with organizations producing similar product to persuade the customers to buy their products ahead of their competitors
Corrective advertising: - a form of advertising meant to correct a misleading information that may have been given out about the product
Reminder advertising: - a form of advertising meant to remind the customers that the product still exists in the market and is still capable of satisfying their needs.

Advantages/Importance of advertising to the business

It maintain the sales of an already existing product
It create awareness in the customers about a new product in the market
It informs the customers about the changes that may have been made in the product
It helps in building image or reputation of the selling organization
It may increase the volume of the existing sales of a product
It reaches peoples who may have not been reached by the sales person
It complements the effort of the sales person to enable them achieve their sales objectives
It clears the customers misconception and prejudice about the product
It opens up new markets for the products.

Disadvantages of advertising to the business

It may be costly to the business in terms of money and other resources
It leads to increase in cost of production if at all it has to be done frequently
The cost of the advertisement will always reduce the profit margin of the business
Poorly planned advertisement may negatively affect the business
Misleading advertisement may reduce the level of business operation

Advantages of advertising to the customer

They educate them on the usage of the product
They inform them on the products availability
They guide them on where to get the product
The outlines all the features about the product including prices to the customer
Competitive advertisement may lead to improved quality of goods to benefit the customer
Information on different prices through competitive advertisement makes the customer to benefit from the reduced prices

Disadvantages of advertising to the consumer

The advertisement may not disclose the side effect of the product
The advertising cost may be passed to the consumers through increased price
Some advertisement may persuade customers to buy what they do not require leading to impulse buying
Some customers may buy substandard goods due to misleading advertisement

Advertising media

These are channels or agents through which an advertisement message is conveyed to the target group. They includes both the print and electronic media which includes; newspapers, journals, magazines, posters, billboards, brochures’, radio, television, neon signs, etc.

Newspaper

These are daily or regularly publications which contains advertisement. They includes, Daily nation, Standard, Taifa Leo, citizen, star, etc.

Advantages of newspaper

The can reach areas that other means may not reach
Many people can afford them as they are relatively cheap
They cover a wider geographical area, leading to a wider market
The message on the newspaper can last for a longer period of time, making it to reach more customers
The advertisement appearing in the newspaper is readily acceptable by the reader
Colored print makes the advertisement to be more attractive to the reader who in turn gets the information

Disadvantages of the newspaper

Many of them are written in English or Kiswahili, making them to only target those who can read and understand the language
It discriminate against the illiterate group who cannot read the information
They have short lifespan as they may be read only on the day it is circulated
It cannot be used to focus on a specific target as they are read by almost everybody
Some of the prospective customers are always in a hurry to read the newspaper and may not pay attention to the advertisement

Magazines and Journals

These are periodic publications meant to target a particular class or group of people. They may be published monthly, quarterly, annually, etc. The information reaches the targeted group as they read them

Advantages of magazines and Journals

The specific information for the targeted people can be published
They can be read and re-read before the next publication may the information to last longer and plead with the prospective customer
Their publication is of high quality and colourful, making them to draw the attention of their targeted group easier and passing the information to them
The quality material they are made of makes them to last longer and can be accessed even by those who may have not been around during their publication

Disadvantages of magazines and journals

If the time gap between the publication time and circulation time is wide, the advertisement may fail
They are a bit expensive which makes some of the potential customers not to afford them
The cost of advertising on them may be expensive for the organization
Their circulations may be limited to a small geographical region
The publications may not be available in the vernacular language to reach those who are not able to read either English or Kiswahili

Posters and Billboards

A form of advertising that may contain the information about the product either in words, pictures or both for the customer to see and read.

Advantages of posters and billboards

They are able to convey the information to the large audience, as they are placed in strategic position
Posters are cheap and easy to prepare
The use of different colors makes them to be more attractive and appealing to more audience
It can be used by both literate and illiterate group
The message may last for a longer period of time
Billboards are conspicuous and hence attractive to the audience

Disadvantages of posters and billboards

May be affected by adverse weather condition, especially rain
If not placed strategically, it may not reach the targeted group
Incase destroyed by the passersby, the information may not meet the targeted group
Bill boards are expensive to make and maintain

Transit/transport advertising

A form of advertisement whereby vehicles such as trailers, matatus, buses, etc are used to carry and convey the advertisement message.

Advantages of transit advertisement

The message reaches most of the people in the environment
They message last long as the paints always last on the vehicle
Transit vehicles may carry the message a long way to their final destination
It is captivating to the members of the public especially the promotion convoy, hence can easily reach the target

Disadvantages of transit advertisement

During the rush hour, the crowd may hinder some from getting the information
It mainly relay the information to those served by the vehicles
The noise produced by the promotion convoy may be a nuisance to some members of the public

Brochures

These are small pamphlets carrying message and pictures about product being advertised.

Advantages of Brochures

They are easy to carry around as they are small in size
They are effective in meeting the targeted group
Their cost of production is not very high
They can be distributed at different places to meet the targeted group
Can be made attractive by the use of different colours
They have a long life and therefore can be used repeatedly
They can be used to direct others on where to get the product

Disadvantages of Brochures

The information may not reach the illiterate group
They may be ignored by the intended users
They may require frequent updating if many changes are made on the product making it expensive

Radio

This is a channel that allows for the advertised messages to be conveyed through sound to the listeners, with some background music accompanying the message

Advantages of Radio

Different languages may be used to reach different people
It is accessible even to the remote areas that is not covered by other media
One can choose the time to advertise to reach the targeted group
Able to serve many people at the same time
It can be used for both literate and illiterate members of the group
The advertisement can be repeated over and over again according to the advertisers needs
The music accompaniment may attract many people to listen to the information
Can reach even the blind as they are able to hear
The message can be conveyed in different languages

Disadvantages of Radio

Their advertisement does not have any reference
It may be more expensive than the print media
Poor timing may make the message no to reach the targeted group
It may interrupt some programmes to the annoyance of the listener
It short and brief advertisement may be missed by the listeners
It is difficult for the listener to visualize the product

Television (T.V) and Cinema

Television is a form of media advertisement where the written words are combined with motion pictures and sound to pass the information
Cinema is where the advertised messaged is conveyed during film shows in the cinema halls. It may be before or after the movie.

Advantages of Television (T.V) and Cinema

It appeals to most people as it is entertaining
It makes it possible for the demonstration of the use of the product
It is able to reach both the literate and illiterate viewers
The advertisement can be aired over and over again to meet the targeted group
The advertisement may be modified when need arise
It has wide appeal to many people
The message can be conveyed in different languages

Disadvantages of Television (T.V) and Cinema

The cost of advertising through this media is high
The television sets are expensive to acquire, hence many people may not have them
Their uses are limited to places with electricity
The advertisement may not last longer
The time for airing the information may not suit the targeted audience

Neon Signs

This is a form of advertisement where the message is passed to the public through the use of electrical signals transmitted through neon lights. They are usually common in the banks, airlines, jewel shops, etc.

Advantages of Neon Signs

The use of different colours makes them very attractive and catch attention of different people
They can be put strategically making them to be visible to many people
Can be used both at night and day
They direct the customer on where the goods are to be found

Disadvantages of Neon Signs

Can only be used where there is electricity
They are expensive to buy and maintain
The message may not easily reach the illiterate

Advertising Agencies

These are businesses that specialize in advertising work and are hired to carry out the functions for other businesses. They are paid a commission for this

Functions of Advertising Agencies

They help the organizations in designing their trademarks, logos and advertising materials
They book space and airtime for their clients in various media
They offer advisory services to their client on selling techniques
They advertise on behalf of their clients
They choose on behalf of their clients the appropriate media to be used

3. Publicity

This is the mentioning of the product or the organization in the mass media to make it be known to many people. There two types of publicity, that is free publicity (where the payment is not required) and Special featured publicity (where there is payment, for example sponsoring an event in the public)

Advantages of Publicity

It saves the organization money in case of free publicity
It is likely to cover a wider region as the publicity is in the media
The organization may earn credibility due to positive publicity
The information may be received positively by the customers as the message is likely to be more objective
It may improve the competitiveness of the firm

Disadvantages of Publicity

Unfavourable information about the organization may reach the public especially in free publicity
It is irregular and short lived
Might require special occasion or event in order to attract the mass media
The firm does not have control on how the information will appear in the media and the extend of the coverage

4. Public relations

A process of passing information with an intention of creating, promoting, or maintaining good will and a favourable image of the organization in the public. It involves informing the public about the firm’s achievement and how it is contributing to the community welfare and development, to get more approval of the public

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product promotion topical questions

1. 1995 P1
The following are types of advertising

Product advertising
Competitive advertising
Information advertising
Institutional advertising

In the table below, match each type with its appropriate description. (4 marks)
Description Type
a) Create awareness about a product
b) Promotes the name of the manufacturer
c) Persuades a particular brand of a product
d) Promotes a particular brand of a product
2. 1995 P2
Abdullah, a manufacturer, exhibited his goods in a local trade shows. However his sales did not increase significantly thereafter. Outline five reasons that may have led to lack of significant sales increase. (10 marks)
3. 1996 P1
State four ways in which consumers benefit from advertising by business people. (4 marks)
4. 1996 P2
Describe the procedures involved in personal selling methods of sales promotion. (10 marks)
5. 1997 P1
Give three reasons why manufacturer may offer after sales services to his customers (3 marks)
6. 1997 P2
Outline five ways of attracting customers that traders may put into use. (10 marks)
7. 1998 P1
Outline four steps involved in personal selling process. (4 marks)
8. 1998 P2
Explain five benefits that a trader would get by advertising his goods through the radio. (10 marks)
9. 1999 P1
State four circumstances under which a trader would advertise his products over the radio instead of the television. (4 marks)
10. 1999 P2
Explain the reasons why the firms with popular products find it necessary to continually advertise the same products. (10 marks)
11. 2000 P1
Identify four disadvantages of advertising through television in Kenya. (4 marks)
12. 2000 P1
List four disadvantages of advertising through television in Kenya. (4 marks)
13. 2000 P2
A multinational company is planning to launch its products in the local Kenyan market. Highlight the factors that should be considered by the company when choosing the appropriate media through which to advertise the products. (10 marks)
14. 2001 P1
Highlight four limitations of after sales services as a method of promoting products.
15. 2001 P2
Explain the role of a sales department in a business firm (10 marks)
16. 2001 P2
What are the benefits accruing to a seller who uses personal selling methods to promote her products. (10 marks)
17. 2002 P1
Outline the advantages of after sales services as a method of sales promotion to a customer. (4 marks)
18. 2003 P1
Highlight three reasons why traders may engage in sales promotion. (3 marks)
19. 2004 P1
State four advantages of personal selling method of promoting sales. (4 marks)
20. 2004 P2
Advertising in the newspaper is one way of promoting sales of goods. Highlight five limitations of advertising goods in newspapers. (10 marks)
21. 2006 Q6 P1
What are the advantages of personal selling as a method of sales promotion? (4 marks)
22. 2007 Q4 P1
A firm wishes to introduce a new product into the market. Outline four factors that should be considered in choosing an appropriate medium for promotion.
23. 2008 Q15 P1
State four reasons why ethical practice is necessary in Product promotion (4 marks)
24. 2009 Q3 P1
Amboseli Enterprises has been spending heavily on promotion of its products though its sales have consistently declined. Outline four measurers that the company may take to reverse the trend. (4 marks)
25. 2012 Q22 P1
Highlight four advantages of promoting sales through the internet. (4 marks)