5 Promotions Opportunity Analysis Chapter Overview 1 Promotions

5 Promotions Opportunity Analysis Chapter Overview 1. Promotions opportunity analysis process. 2. Promotional efforts. 3. Consumer market segments. 4. B-to-B segmentation programs. 5 -1

The Marketing Plan Promotion Opportunity Analysis (marketers identify target audience) Five Steps 1) Conduct a communication market analysis. 2) Establish objectives. 3) Create a budget. 4) Prepare a promotional strategy. 5) Match tactics with strategy. 5 -2

Promotions Opportunity Analysis Step 1 Conduct a Communications. Market Analysis • • • Competitive analysis Opportunity analysis Target market analysis Customer analysis Positioning analysis 5 -3

Competitive Analysis • Identifies major competitors. • Identifies communication strategies and tactics of each competitor. Sources of information • Secondary data • Other people • Primary research 5 -4

Opportunity Analysis (reveals communication opportunities that can be exploited) • Are there customers that the competition is ignoring? • Which markets are heavily saturated? • Are the benefits of our products being clearly articulated? • Are there opportunities to build relationships using a slightly different marketing approach? • Are there opportunities that are not being pursued? 5 -5

Target Market Analysis • What benefits does each target market want from the product? • How can each target market be reached? • What appeal works best for each target market? • What needs of the target market are not being met by a competing firm? • What is the demographic and psychographic makeup of each target market? 5 -6

Customer Analysis Three Types of Customers • Current company customers. • The competitors’ customers. • Potential customers who currently do not purchase the product but may become interested. 5 -7

Positioning Analysis • Positioning is the perception created in the consumers mind regarding the nature of the company and its products relative to the competition. • Positioning is created by factors such as product quality, prices, distribution, image and marketing communications. 5 -8

Product Positioning Strategies § Attributes § Competitors § Use or application § Price/quality § Product user § Product class § Cultural symbol 4 -9

Promotions Opportunity Analysis Step 2 Establish Communication Objectives Possible Objectives: • Develop brand awareness • Increase good/service 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 5 -10

Promotions Opportunity Analysis Step 3 Establish a Communications Budget • Budgets based on • communication objectives • marketing objectives • Budgets vary from consumer to B-to. B markets • Unrealistic assumption to assume direct relationship between advertising and sales. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 4 -11

Factors Impacting Relationship Between Promotions and Sales • • • The goal of the promotion Threshold effects Carryover effects Wear-out effects Decay effects Random events Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 4 -12

FIGURE 5. 5 A Decay Effects Model Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 4 -13

FIGURE 5. 6 Methods of Determining Marketing Communication Budgets • • • Percentage of sales Meet-the-competition “What we can afford” Objective and task Payout planning Quantitative models Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 4 -14

Promotions Opportunity Analysis Step 4 Prepare a Promotional Strategy • Communication strategies are broad, long-term guidelines for the marketing communications program. • Should be linked to opportunities and threats identified by the communication market analysis. • Should fit with the company’s overall message, image and themes. 5 -15

Promotions Opportunity Analysis Step 5 Match Tactics with Strategies Tactics support the communication strategies. Examples of tactics would include: • Specific advertisements. • Personal selling enticements for sales reps. • Sales promotions such as coupons, premiums, sweepstakes, and contests. • Special product packages and labels. • Price changes. • Trade discounts to retailers. 5 -16

Advantages to Segmenting Markets Market segmentation – dividing the marketing into smaller homogeneous groups • Helps identify company strengths and weaknesses. • Identifies the best set of customers. • Clarifies marketing objectives associated with specific target markets. • Allows for more precise communications budgeting. • Links firm’s strategies and tactics to a specific target group 5 -17

Tests to Determine if a Particular Market Segment Is Viable Ø The individuals or businesses within the segment are homogeneous. Ø The market segment is different from the population as a whole and distinct from other market segments (heterogeneous). Ø The market segment is large enough to be financially viable to target with a separate marketing campaign (substantial). Ø The market segment must be reachable through some type of media or marketing communications method (operational). 4 -18

FIGURE 5. 8 Methods of Segmenting Consumer Markets • Demographics • Psychographics • Generations • Geographic • Geodemographics • Benefits • Usage Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 4 -19

VALS 2 Psychographic 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 Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 4 -20

Psychographics and Technology Psychographic Segmentation • New Enthusiasts – cutting edge, eager, high incomes/education • • Hopefuls – cutting edge, lack financial means Faithful – not eager, but not averse Oldliners – not interested in new technologies Independents – higher incomes, but do not value new technology • Surfers – ambivalent about new technology, cynical about business Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 4 -21

Table 4. 1 Characteristics of Generation Segments Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 4 -22

Geodemographic Segmentation • Combines • Demographic census data • Geographic information • Psychographic information • PRIZM • 62 market segments • Southside City • Towns and Gowns Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 4 -23

FIGURE 5. 11 Methods of Segmenting B-to-B Markets • NAICS/SIC code • Type of business • Size of business • Geographic location • Product usage • Purchase decision process • Customer value 5 -24