Page 187 - Cambridge IGCSE Business Studies

13: Marketing mix: place and promotion

Direct mail
KEY TERMS

Direct mail involves posting leaflets or other printed materials directly to the

Direct mail: also known as business offices or homes of potential customers. These potential customers

‘mailshots’, printed materials have usually been identified through market research. This is a very good way of

which are sent directly to the
communicating with a large market over a wide geographical area. However, it is so
addresses of customers.
widely used that there is a danger of it being considered as ‘junk mail’ and thrown
Sponsorship: payment by
away before being read.
a business to have its name
or products associated with a Sponsorship
particular event.
Sponsorship is where a business will pay to have its name linked to an event, or
perhaps to an individual or group of individuals who are in the public eye.
CASE STUDY Sponsorship

Jordan Football Association (JFA) and PepsiCo-Jordan have signed
a new agreement positioning PepsiCo-Jordan as the offi cial beverage
sponsor of national foot ball teams.

Source: Adapted from http://www.jfa.com.jo/DomesticNewsDetails.spx?NID=842&lang=en

185
TASK
Identify and explain why PepsiCo-Jordan may have agreed to sponsor the Jordanian national football team.

KEY TERM The marketing budget and promotion decisions

Marketing budget: the amount All marketing decisions require some level of spending. Money is needed for
of money made available by activities such as market research, changing a product or its packaging, or

a business for its marketing advertising a product to consumers. The funds for these activities come from the
activities during a particular business’s marketing budget, an amount of money available for promotional
period of time.
activities.
The size of the marketing budget affects promotion decisions. Television

advertising, for example, is very expensive and can only be aff orded by
businesses with a large marketing budget. Smaller businesses may only
TOP TIP have a marketing budget that allows them to advertise on local radio or
You must understand when each
in the local newspaper.
type of promotion can be used. However, spending very large sums of money on promotion does not
Consider factors such as cost, size
always guarantee success. A business needs to know that its marketing
of firm, the stage of the life cycle the

product is at. Look for clues in the budget is spent cost-eff ectively. The main way of checking on the eff ectiveness
question to help you. of the use of the marketing budget is to see if it has achieved the marketing
objectives.