Edexcel Business A Level Revision

Promotion - The component of the marketing mix that informs and persuades customers about the product in order to sell that product. Promotion is designed to create awareness, interest, desire and action (AIDA) Promotion = INFORM AND PERSUADE The main aim of promotion is to ensure that customers are aware of the existence and positioning of products . Promotion is also used to persuade customers that the product is better than competing products and to remind customers about why they may want to buy. PROMOTIONAL MIX The promotional Mix describes the promotional methods that a business uses to pursue it's marketing objectives. The main elements of the mix are: ▪Advertising (offline and online) ▪Sales promotion ▪Public relations ▪Merchandising PROMOTIONAL METHODS 1) PUBLIC RELATIONS Involves communicating with the media such as newspapers, television and radio in order to get favourable publicity for the organisation. Guarantee of it always being ...

Predatory pricing - When prices are set low for a short period of time to force competitors out of the market. Prices are then put back to where they were previously or even higher. This strategy is used by dominant businesses, who can afford to make a loss in the short run, to force new entrants out of the market. This is deemed as illegal in the UK. Once existing firms have been driven out and entry of new firms deterred, it can raise its prices. This is ANTI-COMPETITIVE and therefore not in the best interest of consumers in a market. The existing competitors in the market see the new entrant about to launch - and immediately begin to lower prices to retain their customers If the new entrants cannot match the lower price (or provide a product which customers still belive represents value for money) then they may have to choose not to enter the market. The big loser in this is the customers. They are denied a wider choice in products. This therefore means price...