2.7 Promotion and Marketing Communications

Building a marketing campaign and how digital tools changed the way businesses reach customers.

Transcript (186 lines)

0:00 Two weeks before school starts, Theo tapes a second page inside the garage door,
0:04 next to the notebook.
0:06 It is a one-week calendar with Ready to Ride Week written across the top.
0:11 Seven finished commuter bikes wait on the rack, each carrying a signed orange
0:15 inspection tag.
0:16 The page schedules the week: a rebuild timelapse clip posting each morning,
0:21 a QR sticker on every tag linking to a one-page site that lists every bike in
0:26 stock, one message to his subscriber list on Monday,
0:29 test rides at the Saturday stall.
0:32 Across the unit, Theo has promoted one bike at a time.
0:35 This week, every piece fires at once, and this topic names that coordination and
0:40 teaches you to grade it.
0:42 I'm Logan Shaffer, and this is MAMAKO's AP Business,
0:46 Topic 2.7: Promotion and Marketing Communications.
0:50 Two skills by the end: build or evaluate a marketing campaign using the five tools
0:55 of the promotional mix, and explain how digital marketing changed how businesses
0:59 reach customers and what they learn about them.
1:02 Practice questions for this topic are in the next video.
1:05 Let's go.
1:08 A marketing campaign is a coordinated effort that promotes a product to
1:12 potential customers using some or all of the tools in the promotional mix.
1:17 The load-bearing word is coordinated.
1:19 A single listing is a promotion.
1:21 A week where clips, stickers, messages, and a stall all push the same bikes toward
1:26 the same parents at the same time is a campaign.
1:29 Ready to Ride Week qualifies because the calendar does the coordinating:
1:34 every tool fires in a planned order, and every tool points at the target customer
1:38 the notebook identified back in Topic 2.1.
1:43 The promotional mix is the set of five tools a business uses to communicate with
1:48 customers: media advertising, personal selling, sales promotion,
1:52 direct marketing, and public relations.
1:55 The messages those tools carry do three jobs: they differentiate the product from
2:00 competitors, they build brand loyalty, and they increase sales and revenue.
2:06 Theo's differentiator has been fixed since Topic 2.4:
2:10 a certified ready-to-ride bike with the inspection documented on an orange tag.
2:15 Every tool in the campaign carries that same claim, which is what keeps five tools
2:20 sounding like one business.
2:23 Which tools a business selects depends on how its customers decide to buy the
2:27 specific product.
2:29 A consequential purchase carries enough money or risk that the customer wants
2:33 detailed, personalized interaction before saying yes.
2:36 Theo's one hundred fifty dollar road bikes sell that way:
2:40 the hobbyist wants the parts list read aloud, the wheels spun,
2:43 and twenty minutes of questions answered.
2:46 A routine purchase is familiar and low-stakes enough that a message through
2:50 mass media or a direct-marketing piece can close it alone.
2:54 The sixty dollar kids' bikes lean that way: a parent sees the price and the tag
2:58 on a flyer and shows up with cash.
3:01 The instruction: spend the expensive personal interaction on the consequential
3:05 decision, and let cheap messages carry the routine one.
3:11 Media advertising means paid messages through channels like TV,
3:15 radio, newspapers, and billboards, and businesses select it to reach a large
3:20 number of customers with one identical message at the same time.
3:25 A regional chain announcing a back-to-school sale wants exactly that:
3:29 thousands of households hearing one offer in one week.
3:32 Theo prices a quarter-page ad in the local paper, finds it costs more than the
3:37 margin on two bikes, and skips it.
3:40 Skipping a tool is also a campaign decision; this one reaches a mass audience
3:45 he does not need at a price his scale cannot carry.
3:50 Personal selling means a person providing detailed product information or a
3:54 demonstration directly to a potential customer, and Saturday is built on it.
3:59 The test ride is the demonstration.
4:01 The walkthrough of the twenty-one points on the tag is the detailed information.
4:07 Personal selling often includes a sales pitch, a short presentation that conveys
4:11 the product's value proposition, and Theo's fits in one breath:
4:15 half of retail, inspected, guaranteed thirty days.
4:19 For a consequential purchase, this is the tool that closes.
4:24 A sales promotion is a short-term incentive, such as a discount or a coupon,
4:29 and businesses select it to speed up customer decision making or to move unsold
4:33 inventory.
4:35 Theo has both problems on one rack: three sixty dollar kids' bikes that sat all
4:40 summer, and two weeks until every family finishes school shopping.
4:45 So the campaign includes exactly one promotion, ten dollars off any kids' bike,
4:50 during Ready to Ride Week only.
4:52 The deadline compresses the decision, and it is pressure Theo can defend.
4:57 He refused the false-scarcity line back in Topic 2.2 because it was a lie;
5:02 this discount and its end date are both real.
5:07 Direct marketing sends a targeted message to many potential customers at once,
5:11 through pieces like flyers and brochures.
5:14 Theo runs it twice.
5:16 A one-page flyer goes on the table at the middle-school open house:
5:20 inspected commuter bikes, ready before the first bell,
5:23 QR code in the corner, and nearly every parent passing that table belongs to the
5:28 segment it speaks to.
5:30 Then on Monday morning, one message goes to his subscriber list,
5:34 the parents who wrote their names on his order form to hear when the next commuter
5:38 bike is ready.
5:39 That list survived the Topic 2.1 privacy cleanup because it has a stated purpose,
5:45 and this message is that purpose being used.
5:49 Public relations means building a favorable public image through activities
5:54 like press releases and media interviews that turn into media coverage,
5:58 with no specific sale attached.
6:01 The neighborhood weekly runs a back-to-school piece on the
6:04 sixteen-year-old who straightens bent wheels against a twenty-one point
6:08 checklist.
6:09 Theo answers questions about brake cables and helmet fit and never quotes a price.
6:14 No bike sells inside that article, and for months afterward buyers arrive at the
6:19 stall already trusting the orange tag.
6:22 That trust is the return public relations pays.
6:27 Digital marketing means using the internet and digital technology tools,
6:31 websites, email, social media, and mobile apps, to connect with customers and serve
6:37 them.
6:38 Early in the twenty-first century, businesses moved marketing money away from
6:42 traditional channels like newspaper, magazine, radio,
6:45 and TV advertising and toward these digital tools, and Theo's campaign shows
6:51 why. The campaign's spine is digital: the rebuild timelapse clips are scheduled
6:56 social posts, the one-page inventory site updates the moment a bike sells,
7:01 and the QR sticker on every orange tag walks a curious stranger from the physical
7:06 bike to the full rack in one tap.
7:09 Digital tools reach potential customers, whether a global audience or one narrow
7:14 segment, with more personalization and at lower cost than traditional tools manage.
7:20 Theo's entire campaign budget is thirty-six dollars:
7:23 ten dollars of printed QR stickers, eight dollars of open-house flyers,
7:28 and eighteen dollars to boost the best timelapse clip to parents within a few
7:32 miles of the flea market, with the site running free.
7:36 That boost is the personalization.
7:39 The quarter-page ad he skipped would print one message for everyone who opens the
7:43 paper, and the boosted clip lands only on the segment his notebook says actually
7:47 buys.
7:50 The deepest change digital tools brought is measurement.
7:54 Digital marketing collects a large volume of information about how customers respond
7:59 to communication and which factors make them likely to buy,
8:03 and that volume of information is called big data.
8:06 Theo's version fits on one card, the funnel.
8:10 During the week, the clips collect twelve hundred views.
8:13 Forty viewers tap through to the site.
8:16 Nine visitors send an inquiry.
8:18 Four inquiries become sales.
8:20 Now compute each stage.
8:24 Forty divided by twelve hundred is about three point three percent of viewers
8:28 tapping through.
8:29 Nine divided by forty is twenty-two point five percent of visitors inquiring.
8:34 Four divided by nine is roughly forty-four percent of inquiries closing.
8:38 The funnel instructs: fix the weakest stage first.
8:42 Forty-four percent of conversations close, so the stall is doing its job.
8:47 Three point three percent of viewers tap, so next campaign the clips show the QR
8:51 code earlier and hold it on screen longer.
8:55 Set that against the traditional tools.
8:58 Personal selling always allowed this kind of data collection at small scale;
9:02 Theo's two pickup questions from Topic 2.1 were exactly that,
9:06 done by hand.
9:08 A TV ad or a billboard collects nothing: it cannot report who looked,
9:12 who cared, or who walked away.
9:14 The shift to digital was a shift toward tools that keep score.
9:18 One number closes the unit.
9:20 Customer acquisition cost is total marketing spending divided by the number
9:25 of customers acquired, and the campaign's version is thirty-six dollars divided by
9:30 four sales.
9:33 Nine dollars per customer.
9:35 Unit 2 opened with Theo acquiring flea-market customers at five dollars
9:40 each, so the campaign customer costs more.
9:43 It also arrives measured, targeted, and repeatable, and against the eighty-eight
9:48 dollars of lifetime value in margin that Topic 2.1 computed,
9:52 nine dollars still leaves the arithmetic firmly on Theo's side.
9:58 That funnel card is also a grading sheet, because every stage of the campaign runs
10:03 on a decision an earlier topic made.
10:06 The notebook chose the target customer, six parents buying the same safe first
10:10 bike, so every tool this week had one Renee to aim at.
10:15 Consumer behavior explained her yes, the tag as proof and the guarantee as removed
10:20 risk, so that is the claim every tool carries.
10:24 Market research showed the claim earns twenty dollars more per bike,
10:28 so it was worth eighteen dollars to boost.
10:31 Product named the certified ready-to-ride bike, and that name became the one-breath
10:36 pitch.
10:37 Price fixed the thirty-eight dollar margin that makes a nine dollar acquisition cost
10:41 profitable.
10:43 Place set the stall at the bottom of the funnel, where forty-four percent of
10:46 conversations close.
10:48 And promotion coordinated all of it into one week that turned twelve hundred
10:52 strangers into four customers.
10:56 That's Topic 2.7, and that closes Unit 2.
11:00 Four commuter sales put roughly one hundred fifty dollars of margin in the
11:04 cash box on top of a summer of Saturdays, and the ten-dollar deadline cleared the
11:09 last three kids' bikes to families already in the notebook,
11:13 repeat buyers the funnel never counted.
11:15 The notebook has no column for what happens to money after it comes in.
11:20 Theo is sixteen and holding real profit, so what should he actually do with it?
11:26 That question opens Unit 3 on personal saving and borrowing,
11:29 starting with Topic 3.1, Saving for Future Purchases.
11:34 If this helped, a like tells YouTube to show it to more first-cohort students,
11:38 and subscribing gets you the whole course, in order,
11:41 as it's built.
11:42 And the free AP Business vocab pack, every key term from all five units,
11:47 is waiting at mamako.app, link below.
11:50 The 2.7 practice video is ready next.
11:53 See you next time.

What a Marketing Campaign Is

A marketing campaign is a planned push that carries one product message out to the buyers a business wants, using some or all of the promotional mix. Coordinated is the load bearing word here. One listing on its own is a promotion. A planned week in which clips, stickers, messages, and a stall all push the same products toward the same buyers at the same time is a campaign.

A one page calendar taped inside a garage door is enough to qualify. Rebuild clips posting each morning, a code on every tag pointing at a one page inventory site, one message to the subscriber list on Monday, and test rides on Saturday is a campaign because the calendar does the coordinating and every tool aims at the customer the ledger identified back in Topic 2.1.

Essential knowledge: 2.7.A.1

The Promotional Mix

The promotional mix is the group of five tools through which a business communicates with customers: media advertising, personal selling, sales promotion, direct marketing, and public relations. Whatever the mix, the messages those tools carry do three jobs: setting the product apart from competitors, building brand loyalty, and lifting sales and revenue.

A campaign holds together when every tool carries the same claim. A certified ready to ride bike with the inspection documented on a tag is one claim, and five tools repeating it sound like one business rather than five.

Essential knowledge: 2.7.A.2

Matching the Tool to the Decision

Which tools a business selects depends on how customers decide to buy that specific product. Enough money or risk rides on a consequential purchase that the buyer wants detailed personal interaction before agreeing: a hobbyist spending one hundred fifty dollars expects the parts list read out, the wheels spun, and a long run of questions answered. Routine purchases are familiar and low enough in stakes that a mass message or a direct marketing piece can close one alone, which is how a sixty dollar kids' bike sells off a flyer.

The instruction is short: put the expensive personal interaction where the consequential decision is, and let cheap messages handle routine ones.

Essential knowledge: 2.7.A.3

Media Advertising and Personal Selling

Media advertising means paid messages through channels such as television, radio, newspapers, and billboards. Businesses select it when they want many customers receiving a single identical message simultaneously, which is precisely what a regional chain announcing back to school savings needs. A garage business pricing a quarter page newspaper advertisement and finding it costs more than the margin on two bikes skips the tool, and skipping is itself a campaign decision: the reach is real and it is aimed at people who will never buy.

Personal selling means a person delivering detailed product information or a demonstration directly to a potential customer. The test ride is the demonstration and the walk through of the inspection is the detailed information. Personal selling usually contains a sales pitch, a short presentation carrying the value proposition, and half of retail, inspected, guaranteed thirty days fits in one breath. For a consequential purchase, this is the tool that closes.

Essential knowledge: 2.7.A.4, 2.7.A.5

Sales Promotion, Direct Marketing, and Public Relations

A sales promotion is a short lived incentive, a discount or a coupon, selected to speed up customer decisions or to move unsold inventory. Ten dollars off any kids' bike for one week solves both problems at once when three bikes have sat all summer and every family finishes school shopping in a fortnight. The deadline applies pressure, and unlike a faked shortage the deadline is real, which is the distinction Topic 2.2 built.

Direct marketing delivers a targeted message straight to many potential customers at once, using pieces like flyers and brochures. A one page flyer on the table at a middle school open house reaches a room where nearly every parent belongs to the target segment. A Monday message to a subscriber list reaches people who wrote their own names on an order form, which is the stated purpose that let that list survive the privacy cleanup in Topic 2.1.

Public relations builds a favorable public image through activities such as press releases and interviews that produce media coverage, with no specific sale attached. A neighborhood weekly running a piece on a teenager who straightens bent wheels against a documented checklist sells nothing that day, and buyers arrive already trusting the tag for months afterward. That trust is the return.

Essential knowledge: 2.7.A.6, 2.7.A.7, 2.7.A.8

The Digital Layer

Digital marketing means using the internet and digital technology tools, including websites, email, social platforms, and mobile apps, in order to reach and serve customers. Early in this century businesses began moving marketing money away from newspaper, magazine, radio, and television advertising and toward these tools, and a small campaign shows why.

These tools reach buyers, a worldwide audience or a single narrow segment, with more personalization and less money spent than traditional tools require. A thirty six dollar campaign budget of ten dollars in printed codes, eight dollars of flyers, and eighteen dollars boosting one clip to parents within a few miles of the market buys targeting the skipped newspaper advertisement could not. The newspaper prints one message for everyone who opens it. The boosted clip lands only on the segment the ledger says actually buys.

Essential knowledge: 2.7.B.1, 2.7.B.2

Big Data and the Funnel

Measurement is the deepest change these tools brought. Digital marketing gathers information in bulk about how customers respond to a message and what makes them likely to buy, and that bulk of information is called big data. At small scale it fits on one card.

Stage	Count	Rate from the stage above
Views on the clips	1,200	n/a
Taps through to the site	40	3.3%
Inquiries sent	9	22.5%
Sales closed	4	44%

One campaign week, stage by stage

A funnel instructs by naming the weakest stage. Forty four percent of conversations closing means the stall is doing its job, so the fix is not more selling practice. Three point three percent of viewers tapping through means the next campaign should show the code earlier and hold it on screen longer. Set that against traditional tools. Personal selling always permitted data collection of this kind at small scale, and a billboard cannot report who looked, who cared, or who walked away.

One number closes the unit. Thirty six dollars of campaign spending divided by four sales is nine dollars per customer, against the five dollar acquisition cost the unit opened with. The campaign customer costs more and arrives measured, targeted, and repeatable, and against eighty eight dollars of lifetime value the arithmetic still holds.

Essential knowledge: 2.7.B.3

Worked examples

Grading a campaign funnel

Convert campaign counts into stage rates and identify the weakest stage to fix first.

Ready to Ride Week produced four numbers. The rebuild clips collected twelve hundred views. Forty viewers tapped through to the one page inventory site. Nine site visitors sent an inquiry. Four inquiries became sales. Compute the rate at each stage and decide what the next campaign should change.

Views on the clips: 1,200
Taps through to the site: 40
Inquiries sent: 9
Sales closed: 4

1. Compute the view to tap rate
Forty taps out of twelve hundred views is about three point three percent.
\frac{40}{1200}\approx 0.033
2. Compute the tap to inquiry rate
Nine inquiries out of forty taps is twenty two point five percent.
\frac{9}{40}=0.225
3. Compute the inquiry to sale rate
Four sales out of nine inquiries is about forty four percent.
\frac{4}{9}\approx 0.44
4. Find the weakest stage
Each rate uses the stage above it as its denominator, so they are comparable as conversion steps. Forty four percent of conversations closing is strong and three point three percent of viewers tapping is the bottleneck.
5. Convert the diagnosis into a change
The fix belongs where the loss is largest, so the next campaign shows the code earlier in the clip and holds it on screen longer. Spending that effort on closing technique instead would improve the stage that is already working.

Answer
3.3%, 22.5%, and 44%. The stage rates are 3.3 percent, 22.5 percent, and 44 percent. The weakest stage is the jump from view to tap, so that is what the next campaign changes.

Why it matters
A funnel is only useful when each rate is measured against the stage directly above it. Dividing every stage by the original twelve hundred views would make all three look terrible and would hide which one to fix, which is the entire point of the artifact.

Campaign acquisition cost and profit

Compute a campaign level customer acquisition cost and judge it against margin and lifetime value.

Ready to Ride Week cost thirty six dollars: ten dollars of printed codes, eight dollars of flyers, and eighteen dollars boosting one clip. The one page site ran free. The campaign produced four commuter sales at thirty eight dollars of margin each. Compute the campaign acquisition cost, the campaign profit, and judge whether the week was worth running given a five dollar acquisition cost at the stall and an eighty eight dollar lifetime value.

Printed codes: $10
Flyers: $8
Boosted clip: $18
Sales from the campaign: 4
Margin per commuter: $38
Stall acquisition cost: $5
Lifetime value in margin: $88

1. Total the campaign spending
Ten plus eight plus eighteen is thirty six dollars. The site cost nothing, so it adds nothing.
\$10+\$8+\$18=\$36
2. Divide by the customers the campaign acquired
Thirty six dollars across four sales is nine dollars per customer.
\frac{\$36}{4}=\$9
3. Compute the margin the campaign generated
Four bikes at thirty eight dollars of margin each is one hundred fifty two dollars.
4\times\$38=\$152
4. Subtract the spend to get campaign profit
One hundred fifty two minus thirty six is one hundred sixteen dollars of profit from the week.
\$152-\$36=\$116
5. Judge nine dollars against the two benchmarks
Nine dollars is worse than the five dollar stall figure and far better than the eighty eight dollars of lifetime value each customer is expected to return, so the campaign is profitable even though it costs more per customer than the old method.
\frac{\$88}{\$9}\approx 9.8

Answer
$9 per customer, $116 profit. Campaign acquisition cost is nine dollars per customer and campaign profit is one hundred sixteen dollars. Worth running.

Why it matters
A rising acquisition cost is not automatically a failure. Judge it against lifetime value rather than against the previous acquisition cost, and count what the more expensive method also buys: this one is measured, targeted, and repeatable, and the old five dollar figure was none of those.

Key terms

5 common mistakes on 2.7

The wrong moves students actually make on these questions, why each one is wrong, and what to do instead. Part of the practice tier.

See what is included

Essential knowledge covered

2.7.A.1 · 2.7.A.2 · 2.7.A.3 · 2.7.A.4 · 2.7.A.5 · 2.7.A.6 · 2.7.A.7 · 2.7.A.8 · 2.7.B.1 · 2.7.B.2 · 2.7.B.3