CHAPTER 4

Promotion Opportunity Analysis

Promotions Opportunity Analysis

Promotions Opportunity Analysis:

The process marketers use to identify target audiences for an organization’s message and the communications strategies needed to reach these audiences.

IMC Planning Process

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.

Steps in Developing a Promotions Opportunity Analysis

o Conduct a communication market analysiso Establish communications objectiveso Create a communications budget

o Theses steps are usually studied together, rather than sequentially.

COMMUNICATION MARKET ANALYSIS

Step 1

Promotions Opportunity Analysis

Step 1:o Conduct a Communication Market Analysis

o There are three areas in this analysis:1) Competitors Analysis2) Opportunities Analysis3) Target Market Analysis

Promotions Opportunity Analysis

Competitors Analysis: Direct competitors Indirect competitors Market leaders Identify communication strategies and tactics of each

competitor through primary and secondary research.

o Sources of Information include:o Advertisementso Websiteso Customerso Annual reports

Promotions Opportunity Analysis

Opportunity Analysis:o Must ask a series of questions:

o Are there customers that the competition is ignoring?o Which markets are heavily saturated?o Are the benefits of our goods and services being

clearly articulated?o Are there opportunities to build relationships using a

slightly different marketing approach?o Are there opportunities that are not being pursued?

Promotions Opportunity Analysis

Target Market Analysis:o Before we consider the larger issue of a market it

is wise to consider the “customer” Current customers

http://www.youtube.com/watch?v=hINpvlYlIGM&feature=related

Former customers Potential customers Competitors’ customers

Promotions Opportunity Analysis

Target Market Analysis:o Things to consider include:

o What benefits does each target market want from the product?

o How can each target market be reached?o What appeal works best for each target market?o What needs of the target market are not being met by

a competing firm?o What is the demographic and psychographic makeup

of each target market?

Market Segmentation

o The process of identifying specific purchasing groups based on their needs, attitudes and interests.

Advantages of Segmentation:o Identify company strengths and weaknesseso Locate opportunities within marketso Match firm’s expertise with most lucrative marketso Focus budget on specific segment

What’s Happening!

http://www.huffingtonpost.ca/2013/01/21/samsung-blackberry-ad_n_2522213.html

http://www.youtube.com/watch?v=4ckGeOrUkAs

Discussion Slide

o 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?

o Demographicso Psychographicso Generationso Geographico Geodemographicso Benefitso Usage

F I G U R E 4 . 4

Methods of Segmenting Consumer Markets

Generation Segmentation

o Industry o Size of Businesso Geographic

locationo Product usageo Customer value

F I G U R E 4 . 6

Methods of Segmenting Business Markets

Determining Viable Market 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.

TELUS uses ethic marketing to reach the multicultural Canadian market

ESTABLISH COMMUNICATION OBJECTIVES

Step 2

Promotions Opportunity Analysis

Step 2:o Establish Communication ObjectivesCriteria for Defining Objectives:

1. Specific Target Audience2. Specific Tasks3. Specific Changes4. Specific Time

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Promotions Opportunity Analysis

Broad categories of objectives may include:o Develop brand awarenesso Increase good/service category demando Change customer beliefs or attitudeso Enhance purchase actionso Encourage repeat purchaseso Build customer traffico Enhance firm imageo Increase market shareo Increase saleso Reinforce purchase decisions

CREATE A COMMUNICATIONS BUDGET

Step 3

Promotions Opportunity Analysis

Step 3:o Establishing a Communications Budget

o Budgets are based ono communication objectiveso marketing objectives

o Budgets vary from consumer to B-to-B markets

o Unrealistic assumption to assume direct relationship between advertising and sales.

Factors Impacting Relationship Between Promotions and Sales

o The objective of the communicationo Threshold effectso Carryover effectso Wear-out effectso Decay effectso Random events

F I G U R E 4. 7A Sale-Response Function Curve Combined with the Downward Response Curve and Marginal Analysis

Carryover effects are important in advertising products such as boats.

F I G U R E 4 . 8A Decay Effects Model

o Percentage of saleso Meet-the-competitiono “What we can afford”o Objective and tasko Payout planningo Quantitative models

F I G U R E 4 . 9

Methods of Determining Marketing Communication Budgets

Payout Planning Example