Promotions Opportunity Analysis
Lecturer – Md Shahedur Rahman
Introduction
 Individual customers and businesses receive
a countless of promotional materials
everyday.
 Marketing contacts do not happen by
accident.
 Beyond the world of advertising and
personal selling, successful marketing
efforts occur because
.
Promotional Opportunity Analysis
 It is the process marketers use to identify
target audiences for a company’s goods and
services and the communication strategies
need to reach these audiences.
 Communication to each group requires
distinct and somewhat customized
approach.
 An effective promotional analysis identifies
the approach or appeal that is best suited to
each set of customers.
Objectives of POA
 A promotions opportunity analysis must
achieve 2 objectives:
 Determine which promotional
opportunities exist for the company
 Identify the characteristics of each
target audience, to better understand
how to reach that target market
Steps in Promotions Opportunity Analysis
 There are 5 distinct steps
 Conduct a communication market analysis
 Establish communication objectives
 Create a communication budget
 Prepare promotional strategies
 Match tactics with strategies
Communication Market Analysis
 Organization’s strengths and weaknesses in the area of marketing
communication
 Combining that information with an analysis of the opportunities
and threats present in the firm’s external environment.
 Managerial approach called SWOT analysis
 We need to carefully examine 5 areas:
Competitors
 Discover who the competition is, and
what they are doing in the areas of
advertising and communication.
 Marketing tactics, and how they are
attacking the marketplace.
 Potential customers see, hear and read
about the competition.
 Compile a list of all domestic and foreign
competitors, and find out what statements
they are making about themselves using
secondary data:
Competitors
 The we need to find out what other people say
about the competition.
 Sources of information may include
 Trade journals
 News articles and press releases
 Primary research
 Go check out competitor’s outlets, experiencing it
first hand
 Talk to their employees
 Talk to other channel members, like wholesalers,
distributors and agents.
Opportunities
Look for opportunities by examining all the available data
and information about the market.
1.
2.
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Are there customers that the competition is
ignoring, or not serving?
Which markets are saturated, and have intense
competition?
Are the benefits of our goods and services
being clearly spoken to the different customer
market segments?
Are there opportunities to build relationships
with customers using a slightly different
marketing approach?
Are there opportunities not being pursued, or
is our brand positioned in a cluster of other
companies in such a way that it cannot stand
out?
Target Markets
 Firms actually need to understand the needs of
various consumer and business groups.
 Firstly, it establishes what benefit customers are
seeking
 Then determines the various ways in which the
customers can be reached.
 The marketer needs to ask questions – directed
at smaller groups.
 This would help divide the overall market into
smaller market segments, for whom advertising
campaigns can then be designed.
Customers
 There are 3 types of customers that
need studying:
 Current company customers
 Competition’s customers
 Potential new customers
Customers
 Need to understand how people in
each group think, why they buy, when
they buy, where they buy, and how
they evaluate a product after purchase
 Creating effective advertisements and
marketing communications requires
knowing everything that goes on in the
minds of customers.
Product Positioning
 Perception created in the consumer’s
mind regarding the nature of a company
and its products relative to the
competition
 It is important to make sure the position
being promoted is consistent with
current views by the various
constituencies, and is also consistent with
various elements of the IMC program.
Product Positioning
 There are seven possible positioning
strategies are based on:
 Attributes
 Competitors
 Use or application
 Price-quality relationship
 Product user
 Product class
 Cultural symbol
Establishing Marketing Communication
Objectives
 2nd step of a Promotional
Opportunity Analysis.
 Objectives for the marketing
communication are identified.
 Communication objectives help
account execs and advertising
creatives to design effective
messages.
Establishing Marketing Communication
Objectives
 A communications plan is usually geared
towards a single objectives, but it is possible
for a program to accomplish multiple
goals.
 What are the communication objectives
that a firm may wish to pursue?
 ___________________
 ___________________
 ___________________
 ___________________
Common Communication Objectives
 Develop brand awareness
 Increase 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
Establishing a Communications Budget
 Budgets are based on communication
objectives as well as marketing
objectives.
 The communication budgets differ
between consumer markets and B2B
markets.
 Managers are often under the impression
that there is a direct relationship between
expenditures in advertising communications
and subsequent sales revenues.
Establishing a Communications Budget
 Factors that influence the relationship
between expenditures on promotions and
sales include:
 Goal of the promotion – knowledge, liking,
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preference, conviction
Threshold effects – it takes time for sales to
take off
Carryover effects – Coca Cola!
Wear-out effects – becomes old and boring to
outright annoying
Decay effects – with time, people forget – out
of sight, out of mind
Random events – 9/11
Types of Budget
 Percentage of Sales Method
 Meet-the-Competition Method
 “What We Can Afford” Method
 Objective and Task Method
 Payout Planning
 Quantitative Models
Types of Budget
 Percentage of Sales Method
 Sales from the previous year
 Anticipated sales for the next year
 Meet-the-Competition Method
 Matching the competition spending
 May not spent efficiently
 Not how much is pent, but rather how well the money is
allocated
 “What We Can Afford” Method
 After allocating all the budget management think
whatever they can afford
 Normally if the management have no idea about
importance of marketing
 Smaller companies with limited finance always go with
this approach
Types of Budget
 Objective and Task Method
 Prepare all the objectives and calculate the cost of
accomplishing each objectives
 Though its time consuming but can be effective
 Payout Planning
 Ratio of advertising to sales/market share.
 Companies start by spending more, then slowly
narrow it down, once people get over the threshold
level
 Quantitative Models
 Computer simulations may be developed to model
the relationship between advertising with sales and
profits
 These are far from perfect.
Budgeting Expenditures
 A budget is finalized when the company has
specified how funds will be spent on each of the
major communications tools
 Media advertising – 25%
 Trade promotions – 50%
 Consumer promotions – 25%
 These figures vary by industry.
 Consumer products spend more on trade
promotions
 Services spend more money on media advertising
Preparing Promotional Strategies
 Strategies are sweeping guidelines
 They provide long-term direction for all marketing initiatives.
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Coca Cola – Open Happiness
Castrol – It’s More than Just Oil – It’s Liquid Engineering
Nike – Just Do It
Tag Heuer – What Are You Made Of?
Nokia – Connecting People
Matching Tactics with Strategies
 Tactics are activities performed to support strategies.
 They include promotional campaigns designed around themes based on
strategic objectives.
 Methods used in tactical campaigns
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Advertisements based on the major theme or a sub-theme
Personal selling enticements – bonuses and prizes for sales reps
Sales promotions
Special product packaging and labeling
Price changes
 Other enticements in line with strategies may include coupons, gift
certificates, bonus packs, special containers, contests and prizes, etc.
Marketing Segmentation
 Segmentation is essential in completing a POA
 Identify company strengths and weaknesses, along with
opportunities in the marketplace
 Works towards the goal of matching what the firm does
best, with the most profitable set of customers
 Clarifies marketing objectives associated with individual
target markets
 Focuses budgeting expenditures or consumer groups and
business segments more precisely
 Links company strategies and tactics to select groups of
customers
Marketing Segmentation
 4 things that are considered before
considering a segment a viable target for
marketing communication:
 Similar: Individuals or businesses within the
segment should be homogeneous.
 Differentiable: The segment should differ
from the population as a whole.
 Number: The segment should be large enough
 Reachable: It should be reachable through
some type of media
Marketing Segmentation
 Methods of segmenting consumer markets
 Demographics
 Psychographics
 Generations
 Geographic
 Geodemographic
 Benefits
 Usage
Market Segmentation by Consumer Groups
 Segments based on Demographics
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Gender
Age
Income
Ethnic Groups
Psychographics – attitudes, interests and opinions (AIO),VALS2 typology
Segments based on Generations
Segmentation by Geographic Area
Geodemographic Segmentation – census data with psychographic info
Benefit Segmentation – winners, dieters, self-improvers
Usage Segmentation – heavy, casual, occasional, light user
Business to Business Segmentation
 By Industry
 By Size
 By Geographic Location
 By Product Usage
 By Customer Value