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PROMOTIONS
OPPORTUNITY ANALYSIS
INTEGRATED MARKETINGCOMMUNICATION
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The Promotional connect
Beyond the world of advertising &
person selling, successful marketingefforts occur because someone identified
an opportunity to make a quality
contact with a customer.
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The Promotional connect DTHEY?
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Undertaking a thoroughPromotions OpportunityAnalysis (POA) is critical!
Not every Promotion connects
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What is POA?
the process marketers adopt, to matchtarget audiences for goods & serviceswith a promotional communication, thatevokes an effective, positive response.
Two clear goals:
1. Determine which promotionalopportunities exist, &
2. Identify characteristics of targetaudience to match withcommunications message.
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Developing POA: theprocess
1. Conduct a communication market
analysis;2. Establish communication objectives;
3. Create communications budget;
4. Prepare promotional strategies;
5. Match tactics with strategies.
Q. WHAT RECENT PROMOTION HASATTRACTED YOU RECENTLY AS ACUSTOMER?
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A) Communication MarketAnalysis WHY?
1. To focus on an organizations marketingcommunication strengths &weaknesses, &
2. Discover opportunities (or threats) inthe firms external environment.
What must the analysis cover?1. Competitors;2. Opportunities;3. Target markets;4. Customer groups;5. Product positioning.
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A) Communication MarketAnalysis1. Competitors:
Analyze competitive promotional history(recent), promotional campaigns/materials;
Obtain feedback from salesforce/market;
Research (Primary/Secondary) toassess customer response.
Opportunities:1. Find gaps in the market i.e.
opportunities to pursue;
2. Articulate benefits that can fill thegap;3. Create new opportunities to attract
new customers/build customer
relationships.
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A) Communication MarketAnalysis Target markets:
1. Examine target markets;2. Select target market of interest to the
firm;
3. Recognize needs & identify benefitsto match. Customers:1. Cover all: Current/ Competitive/
Potential;
2. Analyze what type of message worksfor each customer group/ or one thatworks for all;
3. Make changes & improvements as
required.
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A) Communication MarketAnalysis
Product Positioning:1. Determine how the brands
positioning is perceived byconsumers, businesses, andcustomers;
2. Ensure promotion & promotionalcommunication tie up with product
positioning.
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B) Define objectives:Some Popular Options!
1. Develop brand awareness;
2. Increase category demand;
3. Change customer beliefs & attitudes;
4. Encourage purchase/ repeatpurchase;
5. Build customer traffic;
6. Enhance firms image;
7. Increase market share.
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B) Setting communicationsobjectives how firms do it!
Companies often benchmark objectivesagainst a market leader or competition;
A successful communication objective isreflected in the medium & messageadopted;
Often a combination of objectives is
used by brand managers.
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C) Establishing a budget
Budgets must be linked with/ or bebased on objectives;
Differences in market characteristicsmust be accounted for arriving ateffective budgets;
Realistic relationship between causeand effect of every action must beunderstood/ assumed.
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The Sales-Response FunctionCurve
An S-shaped sales-response function
curve explains the factors that affect therelationship between Sales &Promotional (A&P) expenditure.
It analyzes impact on Sales Revenue &impact on Profit.
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A Typical Sales-Response FunctionCurve
Thresholdeffects
Sales
ADVERTISING AND PROMOTIONAL EXPENDITURE
MarginalAnalysisCurve
Diminishing Returns
Concave
downwardresponse curve
Profits
DOLLAR
SALES
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CurveFour types of factors or effects1. Threshold effects: the stage at whichthe consumer is willing to respond;
2. Carryover effects: post campaign stage,when a message continues to stay in the
mind (until the need-to-buy arises;3. Wear-out effects: when the message
becomes old and boring and ceases tomotivate;
4. Decay effects: when the message is lost& forgotten & has no impact on buyerbehavior.
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The Sales-Response FunctionCurve
When a promotion is at the thresholdand therefore most effective;
When diminishing returns start to setin (concave downward function);
The marginal analysis curve shows
when the effect of A&P expenditure onprofit becomes negative).
C) M h d f bli hi
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C) Methods of etablishing abudget Percentage of sales method;
Matching the competition method;
What company can afford method;
Objective and task method;
Payout planning method (ratio ofadvertising to market share, allocatinglarger amounts in earlier years);
Quantitative models/ computersimulations.
Q. Which of the above do you find mostpractical?
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C) Splitting the Budget by Media
What needs need to be considered:
1. What is the industry practice?
2. What is the stage of life cycle?
3. What are the media trends?
4. WHAT IS THE COMPANYSPRIORITY/ EXPERIENCE?
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D) Preparing Promotional Strategies Creating the right strategy: Strategies
define the roadmap for a companyspromotional effort, and determine itssuccess.
The typical Mountain Dew approach:
1. Target market: Teenagers & Young Adults
2. Objective: Attract younger people or thoseyoung at heart
3. Slogans: Do the Dew & Been There DoneThat
4. Theme of communication: Action oriented,
high-risk activities & situations.
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D) Matching Tactics with Strategies
Tactics are activities performed tosupport strategies;
Tactics must not distract consumers from
the consistent message of the company,& neutralize its impact.
Some common tactics used in
promotions: Price Offs, Coupons, GiftCertificates, Bonus Packs, SpecialPackaging, Contests & Prizes, Rebates,Volume Discounts etc.