Promotions Opportunity Analysis

Chapter 4

Promotions Opportunity Analysis

Must accomplish two objectives:

1. Determine which promotional objectives exist for the company.

2. Identify the characteristics of each target market, to better understand how to reach that target audience.

Discussion Question

Make a list of five consumer products or services that are segmented on the basis of gender but are sold to both genders. Are there any differences in the product or services attributes? Are there differences in how they are marketed? What are those differences? Do you think that using a different marketing approach has worked?

Steps in Promotions Opportunity Analysis

1. Communication market analysis.

2. Establish communication objectives.

3. Create a communications budget.

4. Prepare a promotional strategy.

5. Coordination of the promo. tools Each of these have multiple components.

Communication Market Analysis Step1 Competitive analysis Opportunity analysis Target market analysis Customer analysis Positioning analysis

Steps in Promotions Opportunity Analysis

1. Communication market analysis.

2. Establish communication objectives.

3. Create a communications budget.

4. Prepare a promotional strategy.

5. Coordination of the promo. tools Each of these have multiple components.

Establishing Communication Objectives - Step2What are some communication objectives that a

firm may wish to pursue? __________ __________ __________ __________ __________

Communication Budgets - Step 3

Budgets based on communication objectives marketing objectives

Budgets vary from consumer to B-to-B markets

Unrealistic assumption to assume direct relationship between advertising sales and market share

4-9

Restaurant ChainsU.S. Market Share vs. Media Ad Spending

Rank Brand Market Share Media Ad Spend (Mil)

Cost Per Share Pt. (Mil)

1 McDonald’s 7.7% $ 727.7 $ 93.9

2 Burger King 2.4% $ 268.8 $ 113.2

3 Wendy’s 2.3% $ 374.7 $161.5

4 Subway 2.2% $ 325.2 $150.1

5 Taco Bell 1.9% $ 231.7 $125.1

Source: “Top 10 Restaurant Chains,” www.adage.com, accessed October 1, 2008

Automotive BrandsU.S. Market Share vs. Media Ad Spending

Rank Brand Market Share

Media Ad Spend (Mil)

Cost Per Share Pt. (Mil)

1 Toyota Camry 5.4% $ 65.6 $ 12.1

2 Honda Accord 4.6% $ 114.3 $ 24.8

3 Honda Civic 3.9% $ 112.0 $ 28.7

4 Nissan Altima 3.2% $ 132.1 $ 41.2

5 Chevrolet Impala 3.1% $ 58.5 $ 18.8

Source: “Top 10 Auto Brands,” www.adage.com, accessed October 1, 2008

11.3%

4.1% 5.2% 7.2%

52.6%

19.6%

30.1%

8.8%

21.2%

5.3%

11.9%

22.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Television Radio Magazine Newspaper TelephoneMarketing

Direct Mail

Marketing Methodology/Media

% o

f Tot

al M

arke

ting

Bud

get

Business-to-Business Consumer

F I G U R E 4. 4An comparative example: Communication Spending for Consumers and B-to-B

Creating a Communications Budget - Step 3Most common methods used include: Percentage of sales Affordable method Competitive-Parity method Objective and task method Payout Planning

Factors Impacting Relationship Between Promotions and Sales

The goal of the promotion Threshold effects Carryover effects Wear-out effects Decay effects Random events

Sales-Response Curve

Carryover effects are important in advertising products such as boats.

F I G U R E 4 . 6A Decay Effects Model

Preparing the Communication Strategy - Step 4 Communication strategies are broad, long-

term guidelines for the marketing communications program.

The communication strategy should be linked to opportunities and threats identified in the communication market analysis.

The strategy should fit with the firms positioning (image, message, theme,etc.)

Coordination - Step5

Matching what you plan to do , with what is actually available to support the communication.

Examples include: specific ads sales promotions - contests, coupons, etc holiday events/anniversary events enticements from sales reps price changes special product packaging for brand extensions

Segmentation and Promotion

Segmentation helps to clarify marketing objectives geared towards specific target markets – critical to address in a promotions opportunity analysis.

This allows for more precise communications budgeting.

This also helps link the firm’s strategies and tactics to a specific target group.

Determining Viable Segments

The segment is different from the population as a whole and distinct from other market segments.

The segment is large enough to be financially viable to target with a separate marketing campaign. Examples?

The individuals or businesses within the segment are homogeneous.

Segmentation Variables

Demographics Psychographics - click Geographic Benefits Sought Usage Geodemographic Segmentation

Combines census demographic data with psychographic and geographic information

Generations - see page 106, table 4.1 -click

VALS 2Psychographic Segmentation Innovators – successful, sophisticated – upscale products.

Thinkers – educated, conservative, practical – durability, value.

Achievers – goal-oriented, conservative, career, and family

Experiencers – young, enthusiastic, impulsive, fashion, social

Believers – conservative, conventional, traditional

Strivers – trendy, fun-loving, peers important

Makers – self-sufficient, respect authority, not materialistic

Survivors – safety, security, focus on needs, price Click to go back

Generation Segmentation