Promotions Opportunity Analysis.ppt integrated marketing communication

Promotions Opportunity Promotions Opportunity AnalysisAnalysis

Promotional Opportunities Promotional Opportunities

Primary Task in creating an Primary Task in creating an effective marketing planeffective marketing plan

A promotion opportunity analysis is a A promotion opportunity analysis is a process marketers employ to identify process marketers employ to identify target audiences for goods and target audiences for goods and services and the communication services and the communication strategies needed to reach those strategies needed to reach those audiences. audiences.

People and businesses are different People and businesses are different and have and have unique uses for unique uses for various various products. products.

Communication Communication to each group to each group requires requires distinct and distinct and customized customized approaches. approaches.

Objectives of a Promotion Objectives of a Promotion Opportunity AnalysisOpportunity Analysis

To develop precise advertising and To develop precise advertising and communications messages for reaching communications messages for reaching the audiences:the audiences:

Determine which promotional Determine which promotional opportunities exist for the companyopportunities exist for the company

Identify the characteristics of each target Identify the characteristics of each target audience audience

The more the marketer knows about an The more the marketer knows about an audience , greater the chances that a audience , greater the chances that a message will be heard, understood, and message will be heard, understood, and result in the desired outcome in terms of result in the desired outcome in terms of a purchase, increased brand loyalty, etc.a purchase, increased brand loyalty, etc.

Five steps in promotion opportunity Five steps in promotion opportunity analysisanalysis

1.1. Segmentation by size:Segmentation by size:

Market segments are identified Market segments are identified based on the size of the company. based on the size of the company.

Toyota Head QuartersToyota Head Quarters

Large firms have needs that are Large firms have needs that are different from smaller companies. different from smaller companies. Marketing effort is often focused on Marketing effort is often focused on the purchase department of a large the purchase department of a large company. In the case of smaller company. In the case of smaller firms, focus will be on the general firms, focus will be on the general manager or the owner.manager or the owner.

2. Segmentation by geographic 2. Segmentation by geographic location:location:

The approach benefits businesses The approach benefits businesses with customers concentrated in with customers concentrated in geographic zones like Silicon valley geographic zones like Silicon valley in California, Bangalore, or trade in California, Bangalore, or trade zone in Noida. zone in Noida.

One can also focus on geographic One can also focus on geographic areas with demographic and areas with demographic and psychographic data psychographic data

3.3. Segmentation by product usage: Segmentation by product usage:

Business markets segmented based Business markets segmented based on the manner in which the good or on the manner in which the good or service service

is used. is used.

Many services like Many services like shippingshipping, , financial, transportation, etc provide financial, transportation, etc provide a variety of uses for distinct a variety of uses for distinct customers.customers.

Examples: Examples: Hotel industryHotel industry arranging arranging events and conventions - events and conventions - Transportation industry arranging Transportation industry arranging buses for employees of buses for employees of factories/companiesfactories/companies

4.4. Next step is to study what Next step is to study what other other people people

say about the competition. Marketers say about the competition. Marketers should read trade journals. The should read trade journals. The marketing team should try to find out marketing team should try to find out how companies close to the how companies close to the competition view them. Understand competition view them. Understand how different companies are viewed how different companies are viewed in comparison with their competitionin comparison with their competition

5.5. Analyze the competition through Analyze the competition through primary primary researchresearch. If you want to study a retail . If you want to study a retail business , go and study how merchandise business , go and study how merchandise is displayed and observe how store’s is displayed and observe how store’s personnel deal with its customers, etc. personnel deal with its customers, etc. The marketing team should also talk to The marketing team should also talk to the store’s suppliers and vendors.the store’s suppliers and vendors.

For understanding other businesses, For understanding other businesses, marketers can talk to the sales people, marketers can talk to the sales people, wholesalers, distributors, agents, etc. of wholesalers, distributors, agents, etc. of the competing firms the competing firms

Opportunities Opportunities Questions marketer must ask:Questions marketer must ask:1.1. Are there customers that the competition is ignoring Are there customers that the competition is ignoring

or not serving?or not serving?2.2. Which are the saturated markets that face intense Which are the saturated markets that face intense

competition?competition?3.3. Are the benefits of our goods clearly articulated to Are the benefits of our goods clearly articulated to

the various customer segmentsthe various customer segments4.4. Are there opportunities to build relationships with Are there opportunities to build relationships with

customers using slightly different marketing customers using slightly different marketing approach?approach?

5.5. Are there opportunities that are not being pursued, Are there opportunities that are not being pursued, or is our brand positioned with a cluster of other or is our brand positioned with a cluster of other companies in such a manner that it can not stand companies in such a manner that it can not stand out? out?

Target MarketsTarget Markets

Examining the target markets is the next Examining the target markets is the next part of part of the analysis. the analysis.

Marketers should recognize the needs of the Marketers should recognize the needs of the various consumers and businesses. various consumers and businesses. Questions one should ask in understanding Questions one should ask in understanding the needs are similar to the ones asked the needs are similar to the ones asked while exploring the opportunities. However while exploring the opportunities. However we should move beyond the target groups; we should move beyond the target groups; the marketing team should decipher the the marketing team should decipher the needs and wants of the individual groups. needs and wants of the individual groups. The overall market should thus be divided The overall market should thus be divided into smaller market segments. The company into smaller market segments. The company can then develop marketing programs and can then develop marketing programs and advertising campaigns suiting each group.advertising campaigns suiting each group.

CustomersCustomers An in-depth analysis of the customers can focus An in-depth analysis of the customers can focus

on:on:1.1. Current company customersCurrent company customers2.2. The competitors’ customersThe competitors’ customers3.3. Potential new customersPotential new customers The point is to understand how people in each The point is to understand how people in each

group think, why they buy, when they buy, and group think, why they buy, when they buy, and they evaluate a product after a purchase. To they evaluate a product after a purchase. To create effective advertisements and marketing create effective advertisements and marketing communications, we should be able to follow communications, we should be able to follow everything that goes through the minds of the everything that goes through the minds of the customers. The main objective of this part of customers. The main objective of this part of the analysis is to figure out what type of the analysis is to figure out what type of message works out for each group. message works out for each group.

Product positioningProduct positioning Product positioning is the perception Product positioning is the perception

created in the mind of the customer created in the mind of the customer regarding the nature of a company and regarding the nature of a company and its products relative to the competition its products relative to the competition

Seven possible positioning strategies:Seven possible positioning strategies:1.1. AttributesAttributes2.2. CompetitorsCompetitors3.3. User or applicationUser or application4.4. Price-quality relationshipPrice-quality relationship5.5. Product userProduct user6.6. Product classProduct class7.7. Cultural symbolCultural symbol

The quality of products, prices charged, The quality of products, prices charged, distribution methods, image distribution methods, image communication tactics, and other factors communication tactics, and other factors create positioning and are, in turn, affected create positioning and are, in turn, affected by the brand’s position. In examining the by the brand’s position. In examining the brand positioning, marketers should brand positioning, marketers should evaluation of the same by the consumers, evaluation of the same by the consumers, customers, and businesses. A problem customers, and businesses. A problem exists when customers view the brand’s exists when customers view the brand’s position differently from the manner in position differently from the manner in which the company sees itself. which the company sees itself.

Establishing Marketing Establishing Marketing Communication ObjectivesCommunication Objectives

Often it could be just one objective, Often it could be just one objective, but it could be more than one.but it could be more than one.

Some of the objectives could be:Some of the objectives could be:1.1. Developing brand awarenessDeveloping brand awareness2.2. Enhancing a brand’s imageEnhancing a brand’s image3.3. Increasing Sales through price Increasing Sales through price

changes, contests, coupons, etc.changes, contests, coupons, etc. The key is to match the medium and The key is to match the medium and

objective. objective.

Communication ObjectivesCommunication Objectives Develop brand awarenessDevelop brand awareness Increase category demandIncrease category demand Change customer beliefs or attitudesChange customer beliefs or attitudes Enhance purchase actionsEnhance purchase actions Encourage repeat purchasesEncourage repeat purchases Build customer trafficBuild customer traffic Enhance firm imageEnhance firm image Increase market shareIncrease market share Increase salesIncrease sales Reinforce purchase decisionsReinforce purchase decisions

Communication objectives must be Communication objectives must be derived from marketing objectives derived from marketing objectives and must be measurable.and must be measurable.

Marketing objectives deal with:Marketing objectives deal with:

1.1. Sales volumeSales volume

2.2. Market shareMarket share

3.3. ProfitsProfits

4.4. Return on InvestmentReturn on Investment

Communications budgetCommunications budget

Budgets are based on marketing and Budgets are based on marketing and communications objectives. Budgets communications objectives. Budgets differ between consumer markets differ between consumer markets and B2B markets. and B2B markets.

It is unlikely that a direct relationship It is unlikely that a direct relationship between communication expenditure between communication expenditure and actual sales revenues could be and actual sales revenues could be made. made.

Factors that affect the relationship between Factors that affect the relationship between

promotional expenses & salespromotional expenses & sales The goal of the promotion: depends on The goal of the promotion: depends on

the stage in the buying processthe stage in the buying process Threshold effects: early effects of Threshold effects: early effects of

advertising are minimal unless the product advertising are minimal unless the product is very innovative or the product is very innovative or the product introduced is under the influence of an introduced is under the influence of an established and strong brand nameestablished and strong brand name

Carryover effects: Some products like Carryover effects: Some products like washing machines or refrigerators are washing machines or refrigerators are purchased only when needed at frequency purchased only when needed at frequency of long intervals. Promotions done earlier of long intervals. Promotions done earlier would come handy at the time of the would come handy at the time of the needs arise.needs arise.

Wear-out effects: At some point of time Wear-out effects: At some point of time an ad. Becomes old or worn-out or boring.an ad. Becomes old or worn-out or boring.

Decay effects: When company stops Decay effects: When company stops advertising consumers fail to remember advertising consumers fail to remember the messages. Sometimes decay sets in the messages. Sometimes decay sets in fast and in other cases carry over effects fast and in other cases carry over effects may hold on for some more time.may hold on for some more time.

Random events: Some vents like 9/11, Random events: Some vents like 9/11, Tsunami, etc can change the course of Tsunami, etc can change the course of events and upset all plansevents and upset all plans

Budget MethodsBudget Methods

1.1. Percentage of sales: based on the currently Percentage of sales: based on the currently expected sales or last year’s sale. Budgets may expected sales or last year’s sale. Budgets may go up and come down drastically when sales go up and come down drastically when sales fluctuate considerably. fluctuate considerably.

2.2. Meet-the-competition Method: the primary goal Meet-the-competition Method: the primary goal of this approach is to make sure that market of this approach is to make sure that market shares do not declineshares do not decline

3.3. ““What we can afford” approachWhat we can afford” approach4.4. The objectives and task method: Managers list The objectives and task method: Managers list

all the specific objectives to be met and all the specific objectives to be met and calculate the cost for each. Many managers calculate the cost for each. Many managers believe that this is the best as it relates costs to believe that this is the best as it relates costs to achieving specific objectives. achieving specific objectives.

5.5. Payout planning: ratio of advertising to Payout planning: ratio of advertising to sales or market sharesales or market share

This method allocates greater amounts in This method allocates greater amounts in the early years to yield payouts in later the early years to yield payouts in later years. Brand awareness and equity are years. Brand awareness and equity are first created through heavy budgets and first created through heavy budgets and once the brand is well established ad. once the brand is well established ad. budgets are scaled down. budgets are scaled down.

6. Quantitative methods: Computer 6. Quantitative methods: Computer simulations. These are related to firms simulations. These are related to firms with a strong computer and statistical with a strong computer and statistical departmentsdepartments

Budgeting ExpendituresBudgeting Expenditures

Generally, Media advertising accounts Generally, Media advertising accounts for 25% of the communication budget; for 25% of the communication budget; trade promotions take up 50%, and trade promotions take up 50%, and consumer promotions the balance 25%. consumer promotions the balance 25%. These expenditures vary considerably These expenditures vary considerably from industry to industryfrom industry to industry

In the case of B2B, 20% go for In the case of B2B, 20% go for corporate image advertising; 80% corporate image advertising; 80% focus on specific goods or servicesfocus on specific goods or services

Total advertising expenditures Total advertising expenditures (in Billions of dollars)(in Billions of dollars)

U.S.A - 137.2 (per capita $ 468) U.S.A - 137.2 (per capita $ 468) Japan – 32.4 (per capita $ 254)Japan – 32.4 (per capita $ 254) Germany – 18.3 (per capita $ 221)Germany – 18.3 (per capita $ 221) U.K. – 20.0 (per capita $ 332)U.K. – 20.0 (per capita $ 332) France – 11.0 (per capita $ 183) France – 11.0 (per capita $ 183) Italy – 8.9 (per capita $ 152) Italy – 8.9 (per capita $ 152) Brazil – 6.9 (per capita $ 52) Brazil – 6.9 (per capita $ 52) Spain – 5.4 (per capita $ 123) Spain – 5.4 (per capita $ 123) Canada – 6.5 (per capita $ 201)Canada – 6.5 (per capita $ 201) Australia – 5.0 (per capita $ 240) Australia – 5.0 (per capita $ 240)