PROMOTIONS OPPORTUNITY ANALYSIS

INTEGRATED MARKETING COMMUNICATION

The Promotional connect

Beyond the world of advertising &

person selling, successful marketing an opportunity to make a quality contact with a customer.
efforts occur because someone identified

The Promotional connect DO THEY?

Not every Promotion connects

Undertaking a thorough Promotions Opportunity Analysis (POA) is critical!

What is POA?
the process marketers adopt, to match target audiences for goods & services with a promotional communication, that evokes an effective, positive response. Two clear goals: 1. Determine which promotional opportunities exist, & 2. Identify characteristics of target audience to match with communications message.

Developing POA: the process

2. 3.

1. Conduct a communication market

4.
5.

analysis; Establish communication objectives; Create communications budget; Prepare promotional strategies; Match tactics with strategies.

Q. WHAT RECENT PROMOTION HAS ATTRACTED YOU RECENTLY AS A CUSTOMER?

A) Communication Market Analysis

WHY? 1. To focus on an organizations marketing communication strengths & weaknesses, & 2. Discover opportunities (or threats) in the firms external environment. What must the analysis cover? 1. Competitors; 2. Opportunities; 3. Target markets; 4. Customer groups; 5. Product positioning.

A) Communication Market Analysis 1. Competitors:

Analyze competitive promotional history

(recent), promotional campaigns/ materials; Obtain feedback from salesforce/ market; Research (Primary/Secondary) to Opportunities: 1. assess customer market i.e. Find gaps in the response. opportunities to pursue; 2. Articulate benefits that can fill the gap; 3. Create new opportunities to attract new customers/ build customer relationships.

A) Communication Market Analysis

Target markets: 1. Examine target markets; 2. Select target market of interest to the firm; 3. Recognize needs & identify benefits Customers: to match.
1. Cover all: Current/ Competitive/

Potential; 2. Analyze what type of message works for each customer group/ or one that works for all; 3. Make changes & improvements as required.

A) Communication Market Analysis

Product Positioning: 1. Determine how the brands positioning is perceived by consumers, businesses, and customers; 2. Ensure promotion & promotional communication tie up with product positioning.

B) Define objectives: Some Popular Options!

1.

2.
3. 4. 5. 6. 7.

Develop brand awareness; Increase category demand; Change customer beliefs & attitudes; Encourage purchase/ repeat purchase; Build customer traffic; Enhance firms image; Increase market share.

B) Setting communications objectives how firms do it!

Companies often benchmark objectives against a market leader or competition; A successful communication objective is reflected in the medium & message adopted; Often a combination of objectives is used by brand managers.

C) Establishing a budget

Budgets must be linked with/ or be based on objectives; Differences in market characteristics must be accounted for arriving at effective budgets; Realistic relationship between cause and effect of every action must be understood/ assumed.

The Sales-Response Function Curve

An S-shaped sales-response function curve explains the factors that affect the relationship between Sales & Promotional (A&P) expenditure. It analyzes impact on Sales Revenue & impact on Profit.

A Typical Sales-Response Function Curve

Sales
Diminishin g Returns Threshold effects Concave downward response curve

DOLLAR SALES

Margin al Analysi s Curve

Profits
ADVERTISING AND PROMOTIONAL EXPENDITURE

The Sales-Response Function Curve Four types of factors or effects

1. Threshold effects: the stage at which

the 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 to motivate; 4. Decay effects: when the message is lost & forgotten & has no impact on buyer behavior.

The Sales-Response Function Curve

When a promotion is at the threshold and therefore most effective; When diminishing returns start to set in (concave downward function); The marginal analysis curve shows when the effect of A&P expenditure on profit becomes negative).

C) Methods of etablishing a budget

Percentage of sales method; Matching the competition method; What company can afford method; Objective and task method; Payout planning method (ratio of advertising to market share, allocating larger amounts in earlier years); Quantitative models/ computer simulations.

Q. Which of the above do you find most practical?

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 COMPANYS PRIORITY/ EXPERIENCE?

D) Creating the right strategy: Strategies Preparing Promotional Strategies

define the roadmap for a companys promotional effort, and determine its success. The typical Mountain Dew approach:

1. Target market: Teenagers & Young Adults 2. Objective: Attract younger people or those

young at heart 3. Slogans: Do the Dew & Been There Done That 4. Theme of communication: Action oriented, high-risk activities & situations.

D) Matching Tactics with Strategies

Tactics are activities performed to support 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, Gift Certificates, Bonus Packs, Special Packaging, Contests & Prizes, Rebates, Volume Discounts etc.