Promotions Opportunity Analysis

1. Promotions Opportunity Analysis Lecturer – MdShahedurRahman

2. Introduction • Individual customers and businesses receive a countless of promotional materials everyday. • Marketing contacts do not happen by accident. • Beyond the world of advertising and personal selling, successful marketing efforts occur because someone identified an opportunity to make a quality contact with a customer.

3. IMC is a program designed to help find the places to make those contacts, and to present the customer with a well-defined message spoken in a clear voice by a firm.

4. Promotional Opportunity Analysis • It is the process marketers use to identify target audiences for a company’s goods and services and the communication strategies need to reach these audiences. • Communication to each group requires distinct and somewhat customized approach. • An effective promotional analysis identifies the approach or appeal that is best suited to each set of customers.

5. Objectives of POA • A promotions opportunity analysis must achieve 2 objectives: • Determine which promotional opportunities exist for the company • Identify the characteristics of each target audience, to better understand how to reach that target market

6. Steps in Promotions Opportunity Analysis • There are 5 distinct steps • Conduct a communication market analysis • Establish communication objectives • Create a communication budget • Prepare promotional strategies • Match tactics with strategies

7. Communication Market Analysis • Organization’s strengths and weaknesses in the area of marketing communication • Combining that information with an analysis of the opportunities and threats present in the firm’s external environment. • Managerial approach called SWOT analysis • We need to carefully examine 5 areas: Competitors Opportunities Target Markets Customers Product Positioning

8. Competitors • Discover who the competition is, and what they are doing in the areas of advertising and communication. • Marketing tactics, and how they are attacking the marketplace. • Potential customers see, hear and read about the competition. • Compile a list of all domestic and foreign competitors, and find out what statements they are making about themselves using secondary data: Website Annual Reports Advertisements Prospectus Promotional Materials

9. Competitors • The we need to find out what other people say about the competition. • Sources of information may include • Trade journals • News articles and press releases • Primary research • Go check out competitor’s outlets, experiencing it first hand • Talk to their employees • Talk to other channel members, like wholesalers, distributors and agents.

10. Opportunities Look for opportunities by examining all the available data and information about the market. • Are there customers that the competition is ignoring, or not serving? • Which markets are saturated, and have intense competition? • Are the benefits of our goods and services being clearly spoken to the different customer market segments? • Are there opportunities to build relationships with customers using a slightly different marketing approach? • Are there opportunities not being pursued, or is our brand positioned in a cluster of other companies in such a way that it cannot stand out?

11. Target Markets • Firms actually need to understand the needs of various consumer and business groups. • Firstly, it establishes what benefit customers are seeking • Then determines the various ways in which the customers can be reached. • The marketer needs to ask questions – directed at smaller groups. • This would help divide the overall market into smaller market segments, for whom advertising campaigns can then be designed.

12. Customers • There are 3 types of customers that need studying: • Current company customers • Competition’s customers • Potential new customers

13. Customers • Need to understand how people in each group think, why they buy, when they buy, where they buy, and how they evaluate a product after purchase • Creating effective advertisements and marketing communications requires knowing everything that goes on in the minds of customers.

14. Product Positioning • Perception created in the consumer’s mind regarding the nature of a company and its products relative to the competition • It is important to make sure the position being promoted is consistent with current views by the various constituencies, and is also consistent with various elements of the IMC program.

15. Product Positioning • There are seven possible positioning strategies are based on: • Attributes • Competitors • Use or application • Price-quality relationship • Product user • Product class • Cultural symbol

16. Establishing Marketing Communication Objectives • 2nd step of a Promotional Opportunity Analysis. • Objectives for the marketing communication are identified. • Communication objectives help account execs and advertising creatives to design effective messages.

17. Establishing Marketing Communication Objectives • A communications plan is usually geared towards a single objectives, but it is possible for a program to accomplish multiple goals. • What are the communication objectives that a firm may wish to pursue? • ___________________ • ___________________ • ___________________ • ___________________

18. Common Communication Objectives • Develop brand awareness • Increase category demand • Change customer beliefs or attitudes • Enhance purchase actions • Encourage repeat purchases • Build customer traffic • Enhance firm image • Increase market share • Increase sales • Reinforce purchase decisions Examples?

19. Establishing a Communications Budget • Budgets are based on communication objectives as well as marketing objectives. • The communication budgets differ between consumer markets and B2B markets. • Managers are often under the impression that there is a direct relationship between expenditures in advertising communications and subsequent sales revenues.

20. Establishing a Communications Budget • Factors that influence the relationship between expenditures on promotions and sales include: • Goal of the promotion – knowledge, liking, preference, conviction • Threshold effects – it takes time for sales to take off • Carryover effects – Coca Cola! • Wear-out effects – becomes old and boring to outright annoying • Decay effects – with time, people forget – out of sight, out of mind • Random events – 9/11

21. Types of Budget • Percentage of Sales Method • Meet-the-Competition Method • “What We Can Afford” Method • Objective and Task Method • Payout Planning • Quantitative Models

22. Types of Budget • Percentage of Sales Method • Sales from the previous year • Anticipated sales for the next year • Meet-the-Competition Method • Matching the competition spending • May not spent efficiently • Not how much is pent, but rather how well the money is allocated • “What We Can Afford” Method • After allocating all the budget management think whatever they can afford • Normally if the management have no idea about importance of marketing • Smaller companies with limited finance always go with this approach

23. Types of Budget • Objective and Task Method • Prepare all the objectives and calculate the cost of accomplishing each objectives • Though its time consuming but can be effective • Payout Planning • Ratio of advertising to sales/market share. • Companies start by spending more, then slowly narrow it down, once people get over the threshold level • Quantitative Models • Computer simulations may be developed to model the relationship between advertising with sales and profits • These are far from perfect.

24. Budgeting Expenditures • A budget is finalized when the company has specified how funds will be spent on each of the major communications tools • Media advertising – 25% • Trade promotions – 50% • Consumer promotions – 25% • These figures vary by industry. • Consumer products spend more on trade promotions • Services spend more money on media advertising

25. Preparing Promotional Strategies • Strategies are sweeping guidelines • They provide long-term direction for all marketing initiatives. • Coca Cola – Open Happiness • Castrol – It’s More than Just Oil – It’s Liquid Engineering • Nike – Just Do It • Tag Heuer – What Are You Made Of? • Nokia – Connecting People

26. Matching Tactics with Strategies • Tactics are activities performed to support strategies. • They include promotional campaigns designed around themes based on strategic objectives. • Methods used in tactical campaigns • Advertisements based on the major theme or a sub-theme • Personal selling enticements – bonuses and prizes for sales reps • Sales promotions • Special product packaging and labeling • Price changes • Other enticements in line with strategies may include coupons, gift certificates, bonus packs, special containers, contests and prizes, etc.

27. Marketing Segmentation • Segmentation is essential in completing a POA • Identify company strengths and weaknesses, along with opportunities in the marketplace • Works towards the goal of matching what the firm does best, with the most profitable set of customers • Clarifies marketing objectives associated with individual target markets • Focuses budgeting expenditures or consumer groups and business segments more precisely • Links company strategies and tactics to select groups of customers

28. Marketing Segmentation • 4 things that are considered before considering a segment a viable target for marketing communication: • Similar: Individuals or businesses within the segment should be homogeneous. • Differentiable: The segment should differ from the population as a whole. • Number: The segment should be large enough • Reachable: It should be reachable through some type of media

29. Marketing Segmentation • Methods of segmenting consumer markets • Demographics • Psychographics • Generations • Geographic • Geodemographic • Benefits • Usage

30. Market Segmentation by Consumer Groups • Segments based on Demographics • Gender • Age • Income • Ethnic Groups • Psychographics – attitudes, interests and opinions (AIO), VALS2 typology • Segments based on Generations • Segmentation by Geographic Area • Geodemographic Segmentation – census data with psychographic info • Benefit Segmentation – winners, dieters, self-improvers • Usage Segmentation – heavy, casual, occasional, light user

31. Business to Business Segmentation • By Industry • By Size • By Geographic Location • By Product Usage • By Customer Value