Chapter 4 promotion analyasis opportunity

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Chapter Four

Promotions Opportunity Analysis

Prof. (Dr.) Kao Kveng Hong, Ph.D., D.Litt.

PetsMartPets are now part of the family.

Discussion Slide

4• Attitudes have changed.• New animal care products.• New animal care services.• Prices are secondary.

Why the Change?

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Chapter Overview1. Promotions opportunity

analysis process2. Promotional efforts3. Consumer market

segments4. B-to-B segmentation

programs

Promotions OpportunityAnalysis4

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1) Conduct communications marketing analysis.2) Establish communication objectives.3) Create communications budget.4) Prepare promotional strategies.5) Match tactics with strategies.

F I G U R E 4 . 1

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Steps in a Promotion Opportunity Analysis

Promotions Opportunity AnalysisStep 1

Conduct a Communication Market Analysis

• Competitors• Opportunities• Target markets• Customers• Product positioning

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Competitors• Identify major competitors.• Identify communication strategies

and tactics of each competitor.

Sources of information•Secondary data•Other people•Primary research

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Opportunities• 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?

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Target Markets• 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?

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CustomersThree Types of Customers

• Current company customers• The competitors’ customers• Potential customers who currently

do not purchase the product but may become interested

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Product Positioning

• Is the perception created in the consumer’s 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.

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Product Positioning Strategies

Attributes Competitors Use or application Price/quality Product user Product class Cultural symbol

F I G U R E 4 . 3

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Promotions Opportunity AnalysisStep 2

Establish Communication 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

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Promotions Opportunity AnalysisStep 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.

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Factors Impacting RelationshipBetween Promotions and Sales

• The goal of thepromotion

• Threshold effects• Carryover effects• Wear-out effects• Decay effects• Random events

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F I G U R E 4. 5A Sale-Response Function Curve Combined with the Downward Response Curve and Marginal Analysis

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Carryover effects are important in advertising products such as boats.

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

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• Percentage of sales• Meet-the-competition• “What we can afford”• Objective and task• Payout planning• Quantitative models

F I G U R E 4 . 7Methods of Determining Marketing Communication Budgets

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F I G U R E 4 . 8Breakdown of Marketing Expenditures

Consumer promotions, 27.9%

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Advertising, 41.1%

Trade promotions, 27.5%

Other, 3.3%

F I G U R E 4 . 9Advertising Expenditures in Top 10 Countries

$6.4 $9.0 $11.1 $18.3 $9.5$38.0

$6.4 $6.7 $18.4

$263.7

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$150.0

$100.0

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F I G U R E 4 . 10Advertising Expenditures by Media

Internet, 6.5%

Outdoor, 2.6%

Radio, 7.4%

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Cable TV, 11.2%

Syndicated TV, 2.8%

Spot TV, 11.5%Network

TV, 18.1%

Newspaper, 19.9%

Magazine, 19.9%

Restaurant ChainsU.S. Market Share vs Media Ad Spending

(Thousands)Rank Brand Market Share Media AdSpend (Mil)

Cost PerShare Pt. (Mil)

1 McDonald’s 7.7% $ 727.7 $ 93.9

2 Burger King 2.4% $ 268.8 $ 113.2

3Wendy’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

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Automotive BrandsU.S. Market Share vs Media Ad Spending

(Thousands)Rank Brand MarketShare

Media AdSpend (Mil)

Cost PerShare 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 3.1% $ 58.5 ImpalaSource: “Top 10 Auto Brands,” www.adage.com, accessed October 1, 2008

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$ 18.8

Shampoos/ConditionersU.S. Market Share vs Media Ad Spending

(Thousands)Rank Brand MarketShare

Media AdSpend (Mil)

Cost PerShare Pt. (Mil)

1 Pantene 19.3% $ 175.8 $ 9.1

2 Suave 7.3% $ 16.1 $ 2.2

3 Clairol Herbal Essence

5.7% $ 22.6 $ 3.9

4 L’Oreal

5.1% $ 38.9 $ 7.6

5 Head & Shoulders

4.9% $ 52.5 $ 10.7

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Source: “Top 10 Shampoos/Conditioners,” www.adage.com, accessed October 1, 2008

Promotions Opportunity AnalysisStep 4

Prepare Communication Strategies

• 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 overallmessage, image, and themes.

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Promotions Opportunity AnalysisStep 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• Special product packages and labels• Price changes• Trade discounts to retailers

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Advantages of Marketing Segmentation

Identify company strengths and weaknesses Locate opportunities Match firm’s expertise with most lucrative markets Focus budget on specific segment

F I G U R E 4 . 12

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Tests to Determine if a Particular MarketSegment Is Viable

The individuals or businesses within the segment are homogeneous.The market segment is different from the population as a whole and distinct from other market segments.The market segment is large enough to be financially viable to target with a separate marketing campaign. The market segment must be reachable through

sometype of media or marketing communications method.

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Methods of Segmenting Consumer Markets

• Demographics• Psychographics• Generations• Geographic• Geodemographics• Benefits• Usage

F I G U R E 4 . 13

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Copyright © 2010 Pearson Education,

A Nail Cares advertisement targeted to females.

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Radio Ad Directed to Children

Click on speaker to play ad.

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An advertisement by Junior Fitness Academy targeted to children.

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

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Psychographics and TechnologyPsychographic 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 newtechnology

• Surfers – ambivalent about new technology, cynical aboutbusiness

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Table 4 . 1Characteristics of Generation Segments

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Ad targeted to seniors.4-35

Geodemographic Segmentation

• Combines• Demographic census data• Geographic information• Psychographic information

• PRIZM• 62 market segments• Southside City• Towns and Gowns

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• Industry (NAICS/SICcodes)

• Size of business• Geographic location• Product usage• Customer value

F I G U R E 4 . 14

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Methods of Segmenting B-to-B Markets

Copyright © 2010 Pearson Ed

A business-to-business advertisement based on the product usage segmentation strategy.

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• Understand the international market• A borderless marketing plan• Thinking globally but acting locally• Local partnerships• Communication segmentation strategies• Market communication analysis• Solid communication objectives

F I G U R E 4 . 1 5Successful Globally Integrated Marketing Communications Tactics

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