6

Promoting and
selling
The main aim of a business is to make a profit by selling goods
and services. To achieve this, businesses use a wide range of
promotion methods to catch the attention of customers and,
hopefully, make a sale.
The task of a wise consumer is to try to get the best value for
their money. By understanding some of the methods used by
businesses to maximise (make the most) sales, you, as a
consumer, can get more for your money. Every day you are
exposed to hundreds of product promotion messages. Buy one
and get one free, Mega-deal, Prices slashed, Save now and so
on are used by businesses in their advertisements to persuade
you to buy specific products.

focus
On completion of this chapter, you will have analysed strategies that
sellers use to promote products and maximise sales and evaluated the
impact on consumers.

outcomes
A student can:
5.1 Apply consumer, financial, business, legal and employment concepts
and terminology in a variety of contexts
5.2 Analyse the rights and responsibilities of individuals in a range of
consumer, financial, business, legal and employment contexts
5.4 Analyse key factors affecting commercial and legal decisions
5.6 Monitor and modify the implementation of plans designed to solve
commercial and legal problems and issues
5.7 Research and assess commercial and legal information using a variety
of sources
5.8 Explain commercial and legal information using a variety of forms
5.9 Work independently and collaboratively to meet individual and
collective goals within specified timelines.

glossary
advertising: a paid, non-personal message
advertising media: the many forms of electronic and
print communication used to reach an audience
below-the-line promotions: promotional activities for
which the business does not make use of an advertising
agency
evaluating: the comparison of planned performance
against actual performance
market segmentation: when the total market is
subdivided into groups of people who share one or
more common characteristics
materialism: an individuals desire to constantly acquire
possessions
monitoring: checking and observing the progress of
something
personal selling: involves the activities of a sales
representative directed to a customer in an attempt to
make a sale
product differentiation: occurs when products that are
the same or similar are made to appear different and/or
better than those of their competitors

product placement: the inclusion of advertising into

entertainment
promotion: the methods used by a business to
inform, persuade and remind consumers about its
products
promotion mix: the various promotion strategies a
business uses in its promotional campaign: personal
selling, advertising, below-the-line promotions, and
publicity and public relations
public relations: activities aimed at creating and
maintaining favourable relations between a business
and its customers
publicity: any free news story about a businesss
products
sugging: selling under the guise of a survey, a sales
technique disguised as market research
target market: the group of customers to whom the
business intends to sell its product
value (for money): to obtain the best quality, features
and performance for a given price of a product

6.1
The selling process
Product differentiation
Walk into any supermarket to buy a loaf of bread
and you are faced with a wide selection from which
to choose: white, wholemeal, sliced, unsliced, glutenfree, vitamin enriched, thick for toasting and so on.
Providing so many different types of breads is a
deliberate selling strategy and is an example of
product differentiation. This occurs when products that are the same or similar are made to appear
different from and/or better than those of their
competitors. By achieving this, the seller is able to
gain a little more control in the marketplace.

Factors which differentiate products

The difference could be as simple as changes to the
packaging or labelling, or more complex, such as
offering top quality service, greater convenience,
better value for money or products that are environmentally friendly. These factors all play a part in persuading consumers that
the product is superior,
therefore
influencing
them to buy it.

Product features and

packaging can be used to
differentiate even the
humble baked bean.

A continual flow of differentiated products such

as Classic Coke, Diet Coke, Caffeine-free Coke,
Cherry Coke and Vanilla Coke has kept the Coca-Cola
Company number one in the Australian soft drink
market in recent years.

Service
Consumers expect a high level of customer service.
Pre-sales and after-sales service are very important
to consumers when purchasing expensive items such
as cars or electrical appliances.
Service may also include the presentation of the
premises, the atmosphere, or the range of products
that set a business apart and capture the consumers
interest.
For example, an exclusive restaurant will offer
full-table service, an extensive menu and a comprehensive wine list. These features differentiate it
from a self-serve bistro.
Convenience
Because todays consumers are busy, they will often
select products that are convenient to use. For
example, many consumers do not have a lot of time
for meal preparation. Consequently, they will select
prepared meals from a supermarket or fast-food
store: the quick-and-easy product.

Which caf
would you
select?

152
New Concepts in Commerce

In response, food manufacturers have developed a

range of convenience food products. The packaging
and cooking requirements are designed to make the
preparation as convenient
as possible.

Sellers can differentiate their product by promoting how

convenient it is.

Value
As a consumer, you want the best value for your
money. That is, you want to obtain the best quality,
features and performance for a given price of a
product. To satisfy this requirement, sellers will
offer and promote a range of products at different
prices. For example, Avon cosmetics has introduced
a collection of medium-priced cosmetics.
To appeal to consumers desire to get the best
value for their money, a business will prominently
display its sale, special, save now, never to be
repeated and prices slashed signs.

UNDERSTAND
1 What is meant by the term product differentiation?
2 List three examples of products that use the

differentiation strategy.
3 Identify the product differentiation features displayed

In a backlash to the growth of fast food in recent

years, there has been a steady increase in the
popularity of slow restaurant meals. Some
restaurants use this change in attitude to successfully
differentiate their product.

on the baked beans label shown on page 152.

4 Examine the two cafs in the cartoon shown on

Social and environmental issues

People are becoming more concerned with quality
of life issues, especially the physical environment.
Businesses that create pollution may risk losing
customers, whereas businesses that adopt a green
philosophy and produce environmentally-friendly
products may see their sales increase. For example,
The Body Shop is committed to producing products
that are sensitive to environmental concerns. It
sells all its products in reusable or recyclable containers, many of which are refillable. It also uses
recycled paper and cardboard for packaging. Furthermore, its production processes are rigorously
self-monitored to guarantee minimal harm to the
environment.

page 152.
(a) List the features used by Chez Paris to achieve
product differentiation.
(b) Which caf do you think most customers will
select? Why?
COMMUNICATE
5 In groups of three or four, choose a product or

service with which you are familiar and list the

types of differentiation strategies used to promote
it. Share your answer with the rest of the class. You
may wish to prepare this as a PowerPoint
presentation.
6 Design an A4 print advertisement for a new model
mobile phone that highlights its exclusive features.
You may wish to use desktop publishing software
to present the advertisement with text and
graphics.
7 As a class, debate the topic Environmentally friendly
products are just a clever promotional strategy to
make purchasers feel good.
Share roles so that those not debating are
involved either in assisting with research or
in running the debate and keeping notes on
the arguments on both sides.
E-LEARNING
8 In what ways is The Body Shop committed

to selling and production practices that are

environmentally friendly? For help, go to
www.jaconline.com.au/commerce, click on
weblinks and access The Body Shop link for
this textbook.
WORKSHEETS

6.1

The Body Shop views environmentalism as a selling

opportunity.

153
Promoting and selling

Product differentiation

6.2
Product promotion strategies
Try this quick quiz.
1. Which soft drink has the worlds most valuable
brand name?
2. Which Australian sport usually attracts the
largest amount of business sponsorship
money?
3. Which brand name is the market leader
in the $600 million Australian footwear
market in terms of sales?
4. Which Australian organisation usually
spends the most on all forms of advertising?
5. Which 3M product was predicted to be a
failure by its marketers?
1. Coca-Cola. 2. Formula One motor racing.
3. Dunlop. 4. Federal government. 5. Post-it notes.

Answers:
All the products in this quick quiz rely on a
range of promotion strategies to achieve their
success.

Promotion
Promotion is defined as the methods used by a
business to inform, persuade and remind consumers
about its products. Many people confuse promotion
with advertising because of its visibility and frequency. However, advertising is just one of the four
elements of the promotion mix. A promotion mix
is the various promotion strategies a business uses
in its promotional campaign: personal selling, advertising, below-the-line promotions, and publicity and
public relations.
Personal selling
Personal selling involves the activities of a sales
representative directed to a customer in an attempt
to make a sale. The major advantage of this method
is that the message can be modified to suit the individual customers circumstances. This method can be
highly effective, as Coca-Cola has demonstrated.
Each year this company supports its massive advertising expenditure with a highly trained sales force
that becomes the human face of Coke to the retailers,
working hard to maintain service and product loyalty.

Personal selling: a time-consuming and expensive

technique that can be highly effective.

Advertising
Advertising is a paid, non-personal message. Print
and electronic mass media are used to communicate
a message about a product. Because of the enormous number of products available, advertising is
an important promotion strategy for businesses. In
2004, Australian businesses spent approximately
$10 billion on various forms of advertising.

The form and presentation of advertisements have

changed over time, but the purpose of advertising
to inform, persuade and remind has remained
constant.
As consumers, we need to be aware of the power
of advertising. The advertised product may not make
us more successful, glamourous, sexy, happy, healthy
or wealthy!

154
New Concepts in Commerce

Advertising is one of
the main forms of promotion used to attract
potential customers by
creating a desire for
the product and communicating essential
information.

Below-the-line
promotions
Below-the-line
promotions are promotional activities for
which the business
does not make use of an
advertising agency. The
promotional activities are
designed and developed
in-house. These
activities include
exhibitions, point-ofsale material,
demonstrations and
direct marketing.
For example, when
you visit a supermarket, you will
often find a sales
representative
encouraging you to
try or taste a product
such as cheese, biscuits or cake, as a part
of a sales promotion.
Free samples an example of below-the-line promotion

Advertising informs,
persuades and
reminds.

Advertising media
Advertising may take many forms, from buying
time on national television to inexpensive leaflets
or posters. Advertising media is a term for the
many forms of electronic and print communication
used to reach an audience.

The line is an imaginary boundary between

those businesses which pay a commission to
external advertising agencies and those which do
not. Three types of below-the-line promotional
activities that are increasing in popularity include:
direct mail catalogues: catalogues mailed to individual households
telemarketing: the use of a telephone to make a sale
Internet marketing: customers purchase via their
television or personal computer.

Television

Radio

Magazines

The four main advertising media

155
Promoting and selling

Newspapers

The role of gender in product

promotion
E-commerce is a rapidly expanding form of
promotion. According to the annual Yellow Pages
Business Index Small and Medium Enterprises
report, approximately one-third of small businesses in
New South Wales expect to use e-commerce to sell
products and services within the next 12 months.

Publicity and public relations

Publicity is any free news story about a businesss
products. It differs from advertising in that it is
free and its timing is not controlled by the business.
As with the other promotion strategies, the main
aim of publicity is to enhance the image of the
product. There are five main types of publicity.
1. Interviews: private meetings of the businesss
representatives with the media
2. Captioned photographs: photograph plus brief
explanation of a new product
3. Feature articles: larger articles outlining the
benefits of a product
4. Press conference: public meetings with the
media where written and graphic materials are
presented
5. Media release: a brief newspaper report sent to
the media.
Public relations are those activities aimed at
creating and maintaining favourable relations
between a business and its customers.

There are two major criticisms of some promotion

strategies, particularly advertising, which relate to
gender. First is the use of stereotypical images of
male and female roles. For example, in most advertisements it tends to be the male who uses the
power tools, or who watches sport with his mates.
Females, on the other hand, are portrayed preparing meals, cleaning the house or caring for the
children.
However, in recent years, advertisements are
starting to appear which portray the new man and
new woman image where stereotypical gender roles
have been reversed. For example, man-with-baby
and woman-tradesperson scenes are becoming
popular images.

Whats new?
Software news and reviews by Ita Chen

The Executive Drive (TED)

Amid the avalanche of new computer products released onto
the market each day comes an exciting new software
package from Integrated Logistics (IL) The Executive
Drive, affectionately known as TED.
Targeted at the novice computer user, TED is a fully
integrated, self-paced instructional package.
TED is ILs bold attempt to provide computer users with a
range of computer skills from basic operations right through to
the most complex applications.
This Australian-made product is the result of extensive
market research and has been three years in development.
TED will meet the needs of a wide range of potential
customers.
As with other IL computer products, a 24-hour help line is
available, a feature many competing products cannot match.
TED has been approved by the Australian Computer Users
Network and comes with a full guarantee. Retail price is
$89.95. For more details contact your local computer retailer
or visit ILs web site at www.intlogistics.com.au.

The Federal Governments New Apprenticeships scheme is

one organisation that is breaking the mould of
stereotypical gender roles in its advertising.

A media release is a commonly used type of publicity.

156
New Concepts in Commerce

The second major criticism refers to the overemphasis on sex to sell products. Some advertisers
target certain groups and appeal to personal desires
such as physical and sexual attractiveness. Unrealistic
images are portrayed as attainable. Sometimes a
double meaning is used for emphasis. A browse through
magazines such as Dolly, Cleo, Cosmopolitan or Ralph
reveals the overuse of sexual themes and connotations.
Sex appeal can be found in advertisements for
products ranging from motor vehicles to toothpaste.
Advertisers use sex appeal to suggest to consumers
that the product will increase the attractiveness
or charm of the user. Although many people are
sceptical of such claims, advertisements that use sex

appeal can have a subtle and persuasive impact.

Consumers need to be critical of such advertisements
and realise they do not represent reality but are
using an attribute sex appeal to sell a product.

Advertisements shall not portray people or depict

material in a way which discriminates against or vilifies a
person or section of the community on account of race,
ethnicity, nationality, sex, age, sexual preference, religion,
disability or political belief. Section 2.1, the Australian
Association of National Advertisers Code of Ethics.

9 What do you think are the strengths and

weaknesses of the following promotion strategies?

(a) A manufacturer of a new type of disposable razor
gives out thousands of free razors at a football
grand final.
(b) A lifestyle magazine runs its own lottery style
promotion for five weeks in which first prize is
$20 000 worth of furniture.
(c) To boost sales, a computer manufacturer
advertises the product on television.

UNDERSTAND
1 What is the main role of promotion?
2 What is meant by the term promotion mix?
3 Distinguish between personal selling and

advertising.
4 List and describe three types of below-the-line

6
7
8

promotion that you have seen in a supermarket or

shopping mall recently.
Which advertising medium would you choose for the
following products? Give reasons for your choices.
(a) IBM computers
(b) toys for children
(c) Nike sports shoes
(d) school textbooks
(e) a hairdressing salon
Suggest reasons why below-the-line promotion is
increasing in popularity among marketers.
Advertising is what you pay for and publicity is what
you pray for. Explain.
In your notebook, construct and complete a mind
map like the one started below to summarise
product promotion strategies. The first list has
been started for you. Alternatively, you may
wish to use a word-processing package.

rti

Product
promotion
strategies
(promotion mix)

COMMUNICATE
10 Design a media release to advertise the opening of a

new music store in your local area. Include the

following details:
name, telephone number and address of the store
date of opening
hours of business
range of stock
any opening special
store logo.
You may wish to use computer graphics software to
design the media release.
11 In groups of three or four, design a television
advertisement to promote your school.
Think about the scenario to be filmed, the dialogue
(if appropriate), the overall message, and the song/
music that will accompany your advertisement.
Think, too, about the aspects of your school which
might appeal to people in your local area.
12 In groups of three or four, discuss whether advertising:
(a) leads or reflects the change in gender roles
(b) could be criticised for over-emphasising sex to
sell products.
Choose a spokesperson to share the groups
comments with the rest of the class.
13 As a class, discuss whether advertising creates
unrealistic expectations that many consumers can
never attain. Record the main points on the board.
Write a paragraph that summarises the points
recorded. You may wish to use a word-processing
package to write the paragraph.
WORKSHEETS

6.2

Product promotion strategies you be the judge

157
Promoting and selling

6.3
Targeting customers
Market segmentation
Few businesses can sell their products to the entire
market the market is just too big. Therefore, a
business will divide the market into distinct segments. For example, a business that is selling diamond rings would not direct its promotion efforts
towards every person in the entire jewellery
market. Some people may want only earrings.
Others may want a watch. Instead, the business
would direct its efforts towards a particular part, or
segment, of the total market for jewellery.
Market segmentation occurs when the total
market is subdivided into groups of people who
share one or more common characteristics. The main
features used to segment the total market are:
age
gender
income level
educational background
geographical location
lifestyle
usage rate.
Once the market has been segmented, the business selects one of these segments to become the
target market.
The ultimate aim of market segmentation is to
increase sales and profits by better understanding
and responding to the desires of the target customers.

Fifty years ago it was common for marketers to talk

of the mass market. In mass markets, the seller
mass produces, mass distributes and mass promotes
one product to all buyers. For example, at one stage
in its history, the Coca-Cola Company produced only
one drink for the whole market, in the belief that cola
would appeal to the mass market. Very few products
today are sold to the mass market.

Target market
Target market refers to the group of customers to
which a business intends to sell its product. Once
the target market has been identified, the business
concentrates its promotion efforts on that group. A
rural supplies business, for example, would normally aim its promotion strategies at the type of
customer pictured below.

rural-based/farmer

male

Segment 1
female, 50+, high income

Total
market

Segment 2
TARGET MARKET
female, 3040,
middle income

Promotion
strategies and
selling techniques

middle to high
income

Segment 3

2560 years of age

female, 1525, low income

The target market for a rural supplies business

Selecting a market segment to be the target market

158
New Concepts in Commerce

An exclusive womens fashion boutique in central

Sydney would have a target market of customers
who are similar to the one pictured here.
UNDERSTAND
1 Explain how market segmentation and target

market are linked.

female

2 What is the purpose of market segmentation?

3 Determine the target market for the following

2545 years of age

city-based

professional

high income

The target market for an exclusive

city fashion boutique

Niche markets
Some businesses target a very small segment of the
total market. This is known as niche marketing. In
a sense, it is a segment within a segment, or a
micro-market. For example, look around any newsagent and you will see row upon row of magazines,
each appealing to a specific niche market male,
female, young, old, high income, low income, urban,
rural, outdoor lifestyle, indoor lifestyle and so on.

products or stores:
(a) Coca-Cola
(b) Rolls Royce
(c) Levi jeans
(d) year 10 Maths textbook
(e) Business Review Weekly.
Share your answers with the rest of the class.
4 Once the total market is segmented, a business
selects a target market. List the different ways a
market may be segmented.
5 Explain why having a clear understanding of the
target market improves the success of a businesss
promotion strategies.
6 Here are five different market segments:
(i) Young married couple, no children
(ii) Female teenager, part-time worker
(iii) Older single person, female, retired
(iv) Younger single person, male, working
(v) Male teenager, full-time student
Listed below are ten products. Copy the list of
products into your notebook and, beside each item,
write the most appropriate market segment
number for that product. In some cases you may
want to write more than one number. Compare
your answers with those of the rest of the class.
(a) Financial advice
(b) Ballet tickets
(c) Bus tour
(d) Dolly magazine
(e) Health insurance
(f) Sony Discman
(g) Rover lawnmower
(h) School textbook
(i) Computer
(j) Furniture
7 Henry Fords famous promotion slogan was
that the customer could have the car in any
colour he or she wished, as long as it was
black. This meant customers wishes were not
considered. Why is this approach to selling not
appropriate today?
8 Outline the difference between the mass
market and a niche market. Provide examples
of both types of market.
INVESTIGATE
9 In pairs, conduct a survey of 30 people to find

out what types of movie they watch at the

cinema. Using a database, group the
respondents by age and gender. Present your
results in the form of graphs and charts, using
word-processing applications or a PowerPoint
presentation.
A magazine for every interest

159
Promoting and selling

6.4
Product promotion strategies:
legal and ethical issues
Legal issues

Ethical issues

Most product promotions are correct in what they

say. Those promotions that make false claims are
breaking the law and will be prohibited. Legislation
(laws) specifically related to promoting and selling
has been passed by both state and federal governments over the years.
The most important of these laws is the Trade
Practices Act 1974 which makes false and misleading advertising illegal. Advertisements must not
use words that are deceptive or claim that a product
has some specific quality when it does not. Such
actions convey a false impression of the exact nature
of the product. For example, after McDonalds Australia Limited advertised its grilled chicken burger
it was found by the court to be in breach of sections
52 and 53 of the Trade Practices Act 1974. The Australian Competition and Consumer Commission
(ACCC) argued that the extensive advertising of the
burger as grilled constituted misleading or deceptive conduct and a false description with respect to
the qualities and history of the burger. The Commission argued that when consumers purchase fast
food they place a lot of importance on the way the
food is prepared. The chicken burger was initially
cooked in an oven, branded and seared and then
cooked between two hot plates. It was not grilled.

The ethics of sponsorship deals

One area receiving a great deal of attention is the
ethics of company sponsorship arrangements,
especially those involving schools. It is not unusual
to have a sports ground named after a teams
sponsor or for the players to wear the sponsors logo
on their uniforms. However, it would be considered
unusual to have pupils attending a school named,
for instance, Coca-Cola Primary School!
School sponsorship arrangements raise a variety
of ethical issues, such as:
over-commercialisation of schools
direct marketing to children
health implications of promoting some food and
drink products
influence on the school curriculum.
Creation of needs materialism
Does product promotion encourage materialism?
Materialism is an individuals desire to constantly
acquire possessions. Those who argue that product
promotion does not encourage materialism point
out that promotion merely satisfies existing needs
of customers; it does not create those needs.
However, critics of product promotion feel that
most businesses, especially large businesses, use
sophisticated and powerful promotional strategies

Misleading advertising claiming a product has

environmentally friendly qualities is not only unethical
but may actually be illegal. For example, labelling which
states a product has 50 per cent more recycled material
than before is misleading if the recycled content has
increased only from 2 per cent to 3 per cent.

The ethical dilemmas of school sponsorship

160
New Concepts in Commerce

(particularly advertisements) to persuade and

manipulate customers to
buy whatever the firm
wants to sell. These
critics argue that promotional strategies create
needs, many of which are
artificial, by playing upon
an individuals emotions.
Promotion satisfying existing needs or creating new
ones?

The ethics of product placement

Chances are that you, along with thousands of
other film-goers, have seen the films Matrix:
Reloaded, Minority Report or GoldenEye. All these
movies used a promotion strategy referred to as
product placement: the inclusion of advertising
into entertainment. For example, in Matrix:
Reloaded, when the characters travel through time
(teleport) they do so through a Samsung mobile
phone with the Samsung logo clearly visible. In the
first Matrix film, teleporting was via Nokia phones,
sales of which afterwards skyrocketed.

Product placement, especially the motorised variety, is a

traditional part of the James Bond films. In GoldenEye,
the BMW Z3 Roadster was prominently featured.

In Minority Report, which actually satirised the

technique of product placement, 15 brands
including Gap (clothing) and Lexus (motor vehicles)
were prominently placed throughout the movie,
earning the producers approximately $43 million.
Businesses are keen to use this promotional technique because it allows them to reach savvy but
advertisement-weary consumers. However, critics of
product placement argue that, because of its concealed nature, this type of advertising blurs the line
between what is advertising and what is entertainment. Consequently, product placement may be seen

as subliminal or, in the words of marketers, getting

under the radar of consumers.
Sugging
Have you ever been approached by someone in a
shopping centre and asked to complete a short
survey? Perhaps you have been contacted by telephone and surveyed about a particular product,
only to discover the person was really trying to sell
you something? If so, then you have been sugged.
Sugging, selling under the guise of a survey, is a
sales technique disguised as market research.
This technique is not illegal, but it does raise
several ethical issues, especially the invasion of
privacy and deception.

UNDERSTAND
1 What is meant by the term:

(a) sugging?
(b) product placement?
2 Provide a brief description of misleading
advertising.
3 How did the ACCC determine that
McDonalds had conveyed a false
impression of the nature of their grilled
chicken burgers? Do you agree with the
ACCCs decision?
4 Present arguments for and against
business sponsorship arrangements
involving schools.
5 Do you consider product placement an
ethical or unethical promotion strategy?
Give reasons for your answer.
6 Suggest reasons why sugging may be an
unethical practice.
7 Why is it sometimes difficult to decide
whether a promotion strategy is ethical or
unethical?
8 You have been asked by your manager to
place a special sign on a number of
items but the price is not to be lowered.
Is this an ethical or unethical practice?
Compare your answer with those of other
class members.
COMMUNICATE
9 In groups of three or four, prepare a report critically

analysing the ethical issues involved in:

(a) advertising to young children during morning
television programs
(b) using sexual overtones and imagery in
advertisements.
You may wish to use desktop publishing software
to present the article with text and graphics.
WORKSHEETS

6.3

161
Promoting and selling

Create an advertising storyboard

6.5
Applying selling techniques
Development and implementation of
selling techniques for a particular
product Coca-Cola
The Coca-Cola soft drink was released onto the
Australian market in 1938, 50 years after its release
in the USA. The first distinctively shaped bottles,
themselves part of the Coca-Cola Companys overall
promotion strategy, were produced in that year by
one of Sydneys oldest soft drink factories.
Australian consumption of soft drink was growing
but that did not guarantee the Coca-Cola product
immediate success. Early sales representatives for
the company were lucky if a storeowner bought a
single bottle, let alone a case.
The war in the Pacific region in the early 1940s
was the stimulus needed by the Australian producers of the soft drink. With the American Armed
Forces now established in Australia and the region,
a ready-made market was in place and production

greatly increased to satisfy this demand. Conditions

were right for a post-war boom in sales.
It was now time for the promotion strategies and
selling techniques to be fully implemented, with advertising campaigns being the most visible promotion
strategy.

Contemporary Coca-Cola soft drink advertisement

Advertisements for the Coca-Cola product were

initially aimed at older age groups, a reflection of
the main target market selected in the USA. Over
the years, the target market was modified to
concentrate on teenage and young adult consumers.
The companys selling technique was so successful
that the product has become Australias market
leader in the soft drink market.
In the last year, 1.6 billion litres of Coca-Cola were
sold in Australia, out of total worldwide sales of
17.1 billion litres. Since the early 1950s, teenagers
and young adults have grown up believing that this
product truly is a part of their lives: Coke is it.
Through its sophisticated promotion strategies and
selling techniques, the Coca-Cola Company has built
on its highly recognisable brand name by constantly
implementing new promotion strategies.

The Coca-Cola Company has proved that it does not

need new markets to expand. It can grow by
introducing new products. Vanilla Coke, introduced
onto the Australian market in 2002, had one of the
fastest acceptances of any consumer product ever
launched in Australia. About 34 million litres were sold
in the first three months after its launch.

The Coca-Cola Companys advertising has always

adopted a consistent message that Coke is a part of
life, associated with fun and pleasure.

162
New Concepts in Commerce

Selling techniques of the Coca-Cola

Company
The Coca-Cola Company uses a wide variety of selling
techniques to maximise sales.
Product development

Product promotion

Wide range of products

including:
Cherry Coke
Vanilla Coke
Sprite
Fanta
Frutonic
Nestea Cool
Pump
Neverfail Springwater
Diet Coke
Fresca
Lift
Fanta 'lemon'
'Winnie the Pooh' juice
Powerade
Peats Ridge water
Aquarius

Advertising
Sponsorship
More distribution outlets
e.g. fast food fountains,
vending machines
Sales representatives
Interactive web page
Competitions
Product placement

Product differentiation

Product enhancement

Product features
e.g. bottle shape
Advertising to
reinforce image
Recognised brand name,
symbol, logo and colour

Different Coke
products targeted
at specific markets
e.g. Classic Coke,
Caffeine-free Coke
Improved packaging
bottles
cans
New signage

Product pricing
Reduce prices for specific
promotional activities
and supermarket sales

Product niche focus

Targeted promotion strategies,
e.g. SMS messaging to 1830
year old generation

Selling techniques used by

the Coca-Cola Company

UNDERSTAND
1 What is the message the Coca-Cola Company has

adopted in its advertisements?

2 Cokes successful formula is not the ingredients of

the drink but its superior selling techniques. Do you

agree or disagree with this statement? Give reasons
for your answer.
3 Any business that neglects to develop effective selling
techniques will almost certainly experience low levels
of sales and reduced profit levels. Why is this so?
4 What are the advantages to the Coca-Cola Company
in diversifying and selling water and fruit juice
products?
5 Select three selling techniques used by the Coca-Cola
Company and explain how each one helps the
company increase its sales.
INVESTIGATE
6 Select a product or service with which you are familiar.

Research and prepare a report on the selling

techniques used by the business. Present your report

using a multimedia application and graphics to enhance
the presentation of information.
7 In groups of three or four, research the selling
techniques used by Nike. Share your responses with
the rest of the class.
E-LEARNING
8 A business can have a products name or symbol

registered as its trademark. The Dynamic Ribbon

device and the contour bottle design are trademarks
of the Coca-Cola Company.
(a) What is meant by the term trademark?
(b) What icon is used to show that the name or
symbol is a registered trademark?
(c) Why would a business want to protect its
trademark?
To help you, go to www.jaconline.com.au/commerce,
choose weblinks and click on the Intellectual Property
Australia link for this textbook.

163
Promoting and selling

6.6
Monitoring and evaluating
selling techniques
An interview with
Alegria Bartock,
Omni Electronics Pty Ltd
INTERVIEWER: What does Omni
Electronics produce?

ALEGRIA: Omni manufactures a range

of home theatre systems
including digital receivers
and integrated digital
televisions.
INTERVIEWER: Alegria, what is your role
in the business?
ALEGRIA: I am the Sales Manager.
INTERVIEWER: What selling techniques has your company
used in the past?
ALEGRIA: Our products are aimed at the male, high income,
45 to 55 years age group target market.
Consequently, our products were sold through
exclusive hi-fi stores. We relied heavily on personal
selling and below-the-line promotions. Our sales
representatives concentrated on specific stores
within their territories. Very little direct advertising
was done, apart from some trade journal media
releases and pamphlets distributed at trade fairs.
INTERVIEWER: Why did you recently introduce a new selling
technique?
ALEGRIA: Because the company decided to target a new
market. We wanted to start selling to the male and
female, middle income, 2030 years age group
target market.
INTERVIEWER: What new selling techniques did you
introduce?
ALEGRIA: We decided to use a print advertising campaign.
Full page, colour spreads were placed in
electronics, video, hi-fi and suitable lifestyle
magazines. These advertisements were
supplemented with a catalogue that was
distributed to selected geographical areas.
INTERVIEWER: How have you been involved with the new
selling techniques?
ALEGRIA: As the sales manager, one of my main tasks is to
monitor and evaluate the effectiveness of the new
selling techniques. Monitoring means that I have to
check and observe the actual progress of the new
selling techniques. This requires gathering sales
figures data. Just as a hospital patient is regularly
monitored by medical staff for any signs of change,
so, too, must the selling techniques be monitored.

Print
advertising was
through
magazines and
catalogues.

INTERVIEWER: What do you do with the data you collect?

ALEGRIA: The data collected during the monitoring stage is
used to evaluate the selling techniques.
Evaluating involves comparing what we forecast
to happen against what actually happened.
Remember, the aim of selling and promoting is to
increase sales and maximise profit. By evaluating
the new selling techniques, I can determine
whether our actual sales are above or below what
we forecast. If the sales are above what we
forecast then the new selling techniques have
been a success. If the figures are below, we need
to take some type of corrective action.
INTERVIEWER: Were the new selling techniques a success?
ALEGRIA: Here are the sales figures for April, May and June
the second quarter of the year.
Sales for Omni Electronics 2nd quarter

Forecast
sales $

Actual
sales $

Difference
$

% change
( decrease
+ increase)

1
2
3
4
5

50 000
80 000
70 000
65 000
45 000

58 000
85 000
67 000
72 000
50 000

8 000
5 000
3 000
7 000
5 000

+16.0
+6.3
4.3
+10.8
+11.1

Total sales
revenue

310 000

332 000

22 000

+7.1

Sales
territory

164
New Concepts in Commerce

UNDERSTAND
1 What data did Omni Electronics need to collect to

monitor and evaluate the new selling techniques?

2 How can a business evaluate the effect of its selling

techniques on its customers?

If you look at the bottom line, you can see that the
total sales revenue increased by $22 000 or 7.1 per
cent above our forecast. This is a pleasing result.
I am concerned about the result in sales territory 3.
I will need to investigate that later. However, all the
other territories performed above expectations.
This tells me that the new selling techniques are a
success. We will obviously continue with them.
INTERVIEWER: How do you evaluate the effectiveness of the
selling techniques on your customers?
ALEGRIA: This is more difficult but it is important that it be
done. Essentially, we rely on two methods. First,
we make regular contact with our customers and
talk to them.
This feedback
provides me
with lots of
ideas. It also
lets us know if
the customers
are satisfied
with our
products.
In addition,
written surveys
are sent twice a
year to a
representative
sample of our
customers.
The survey
asks for
feedback
about
satisfaction
with product
features,
Regular customer contact is
performance,
quality and the made to assess the level of
consumer satisfaction.
level of aftersales service.
We outsource the survey to a marketing company.
INTERVIEWER: Why dont you just use the sales figures as an
indication of customer satisfaction?
ALEGRIA: Obviously, if your products, customer service
and selling techniques are all functioning well,
sales will increase. However, it is possible that
we are not achieving maximum level of sales
because of some consumer dissatisfaction. We
can only evaluate this by talking to our
customers.

3 Why is it important to survey customers?

4 Explain how monitoring and evaluating are linked.
5 A business has a sales potential of $90 000 but

achieves actual sales of only $25 000. What does

this signify? What should the business do next?
6 Any business that fails to monitor its sales will not
be able to evaluate the effectiveness of its selling
techniques. Discuss.
7 You have just been appointed sales manager for
Oz-T-Shirts Pty Ltd. One of your first tasks is to
evaluate the sales performance as shown in the
following table.
Sales for Oz-T-Shirts 2nd quarter

Sales
territory
1
2
3
4
5

Forecast
sales $

Actual
sales $

39 000
64 000
42 000
47 000
54 000

45 000
68 000
46 000
43 000
62 000

Difference
$

% change
( decrease
+ increase)

Total sales
revenue

(a) Complete the table.

(b) Analyse the forecast and actual sales. What do
these figures indicate?
(c) Would you recommend continuing with the
selling techniques? Why?
8 Look at the Omni Electronics sales data on page
164 and then complete the tasks.
(a) Which sales territory had the:
(i) highest actual sales?
(ii) lowest actual sales?
(b) What does the Difference column measure?
What is the importance of this column?
(c) Which sales territory had the:
(i) largest percentage change?
(ii) smallest percentage change?
(d) What is the importance of having a % change
column?
(e) Convert this data into two line graphs measuring
Forecast sales and Actual sales. Carefully label
the graphs and provide a key. You may wish to
use a multimedia application to construct your
graphs.
WORKSHEETS

6.4
6.5

165
Promoting and selling

Strategies for product selling and promotion

Topic test promotion and selling