Professional Documents
Culture Documents
QUESTION 6
Sales Promotion
A diverse collection of incentive tools, mostly short term, designed to stimulate quicker &/or
grater purchase of particular products/services by consumers or the trade. Where advertising
offers a reason to buy, sales promotion offers an incentive to buy. It includes tools for consumer
promotion, trade promotion & business & sales force promotion.
Rapid growth: A decade ago, ad-to-sales promotion ratio was about 40:60, now is like
25:75 & growing. This is due to managers need to increase sales (internal) & some external
causes like: the # of brands has increased (seen as similar), competitors use prom frequently,
consumers are more price oriented, etc.
Purpose of Sales promotion: Sellers use incentive-type promotions to attract new triers,
to reward loyal customers, & to increase the repurchase rates of occasional users. Price
promotions usually build short-term volume that is not maintained, but it enables manufacturers
to adjust to short-term variations in supply & demand.
Pre-testing the sales-promotion program: To see if the tools are appropriate, the
incentive size optimal, & the presentation method efficient.
Evaluating the sales-prom results: Manufactures can use 3 methods to measure salespromotion effectiveness: sales data (using scanner sales data), consumer surveys (who recalled
the prom, what they thought about it, how many took advantage of it, & how the prom affected
subsequent brand-choice behavior) & experiments (vary attributes as incentive value, duration,
& distribution media).
There are other potential costs & problems: Promotions might decrease long-run brand
loyalty, can be more expensive than they appear, there are costs of special production runs, &
certain promotions irritate retailers.
The Steps in Planning an Effective Sales Promotion Program
An effective sales promotion gives you a way to attract customers while introducing and building
your brand. Sales promotion programs need to be sporadic events so your customers feel as if
theyre getting a real deal and need to jump on it immediately. Otherwise, if you put on too many
sales events, your customers may decide to just wait until the next sale to buy your companys
offerings, and then youll see a decline in your overall profit.
Identify Your Target Market
All sales promotion programs start with identifying your primary and secondary target markets.
If you sell directly to consumers, take a look at the characteristics of the market to learn about
their buying habits, demographics and the media outlets to which they pay attention. If you sell
to channels, look for their common characteristics so you learn what gets their attention and
compels them to give you more shelf space or get the dealers enthusiastic about your product.
Setting Goals
Determine the goals for your promotion, and include actual sales figures you want to reach. Your
goals may include introducing your brand to your target market or building your database of
customers so you can market to them in the future. If you sell your product through distribution
channels, your goal may include encouraging those channels to give you optimal shelf space and
getting their customers enthused about your offerings.
Choosing the Mix
Most sales promotion plans require a mix of media to reach the target market. You may need to
get announcements into customers' mailboxes, in print publications, or on the radio and
television. Plan a social media campaign that includes updating your website with the sales
promotion information and postings via Facebook and Twitter that get people enthused about the
event. If you sell to channels, involve your sales force and use trade shows as ways to build
enthusiasm. Include a press campaign to build buzz about your promotion.
Creating the Message
The design of your message needs to appeal to your target market, so use graphics, headlines and
copy that grab attention and cause the reader to take action. Offer coupons or discounts to entice
prospects to buy. If you rely on your sales staff to push your product, give them an incentive to
get the word out and increase orders.
Implementation
Knowing your target market and its buying habits helps you decide on the best time to
implement your sales promotion. Your promotion must also match up with your ability to
provide enough product to fill orders. If you use direct marketing tactics to get in front of
prospects, include enough time to test the piece so you can make changes that make the message
more compelling.
Tracking
Keep an eye on the ongoing promotion to make sure everything stays on track. You also need to
evaluate the promotion once it finishes to determine the success of the event and how goals were
met.
Question: 4
Product Differentiation:
The task of positioning is to deliver a central idea about a company or an
offering to the target market. Differentiation goes beyond positioning to spin
a complex web of differences characterizing that entity. I.e. one brand
should be differentiated from another brand available in the market of the
similar nature. Differentiation can be defined as " The process of adding a
set of meaningful and valued difference to distinguish the company's
offerings from the competitor's offering.
Product development, Product Differentiation and Product positioning are the
central theses in the marketing strategy of a firm & are closely interlinked.
The major attraction and the major benefit of differentiation is that it takes
the firm away from a total price-route competition. In other words, it helps
the firm to fight on non-price front with all benefits associated with it. So,
differentiation is a crucial decision for a firm and it forms an integral part of
its marketing strategy.
The companies can achieve differentiation using the product development or
distribution method or promotional aspects. Actually, right from the plant
location to the after sales services that company offers, anything can be
used to differentiate an offer and make it "Different"
Through differentiation in product, service or packaging, firm moves to a
position wherein it can claim a premium in the market.
Though the differentiation can be achieved in many ways, the maximum
scope for exploiting differentiation remains with the product. The product
forms a core part in the differentiation strategy amongst the other P's of the
Marketing Mix.
Product Differentiation is of vital importance in product management and has
potential in forging successful marketing strategies
Example:
Procter & Gamble's Head & shoulders is considered among the top brands in
Indian Anti-Dandruff Shampoos, H & S differentiates itself from its close
competitor Clinic All Clear Anti-Dandruff Shampoo in the sense that it is
available in different varieties like Menthol, Lemon & Strawberry as well as
having a ZPTO factor in it which makes a USP of H & S and positioning it as
one of the best brands in the Anti Dandruff Shampoo market.
Nestle Milk is available in Tetra Pak which des not require any preservation
and it can be stored for a longer time without any refrigeration and boiling
which is not the case with other milks.
Ultimately, the company wants it's customers to say "it's different."
For the successful marketing; three key factors i.e. Segmentation, Differentiation
and positioning.
Determine the major differentiating attributes available to firms .
Describe the marketing strategies that are applied at each stage of the product
life cycle.
Now let us see how most of the Marketing Authors have defined differentiation as:
An act of designing a set of meaningful differences to distinguish the companys
offering from its competitors offerings.
The concept of differentiation is an important piece of the marketing puzzle.
Companies can differentiate its market offering dimensions of;
1.Product,
2.Service,
3.Personnel,
4.Image,
5.Price,
6.Distribution,
7.Promotion in order to distinguish the company from its competitors.
Question 8
1) CUSTOMIZATION:
Providing the products/Providing the services intune with the customer/consumer/clint
needs than the companies wishes/conventional procedures. Its .Acting/moving/learning
/decision making/implementing strategies/ modifying procedures/ modifying process/
modifying policies with respect to the changing needs in the market/industry/society
unlike adopting the unique conventional approaches. To be precise ,acting intune with
the changing needs
EXAMPLES:
1.Implementing the M&A (merger & acquisition) strategy than building the new
ones(firms/industries).
2. Free gifts strategy for purchased goods to attract the customer/consumer and also
to
3. Performance appraisals
4. Firing the employees under injustice and fraud conditions
5. EMI ( Equatory monthly installments ) strategy unlike amount payable in one
installment
6. Customer oriented than product/technology oriented
7. Targeting total customer satisfaction (TCS).
8. Maintaining corporate social responsibility (CTS).