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 analysis o Establish communications objectives o 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 Analysis 2) Opportunities Analysis 3) 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 Advertisements o Websites o Customers o 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=relate d http://www.youtube.com/watch?v=hINpvlYlIGM&feature=relate d 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? http://www.youtube.com/watch?v=oEa_zFTyN8E http://www.youtube.com/watch?v=oEa_zFTyN8E http://www.youtube.com/watch?v=tlUqMmfiaME http://www.youtube.com/watch?v=tlUqMmfiaME http://www.youtube.com/watch?v=Nd_t60ePLA0 http://www.youtube.com/watch?v=Nd_t60ePLA0 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 weaknesses o Locate opportunities within markets o Match firm’s expertise with most lucrative markets o Focus budget on specific segment
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 Demographics o Psychographics o Generations o Geographic o Geodemographics o Benefits o Usage F I G U R E 4. 4 Methods of Segmenting Consumer Markets
o Industry o Size of Business o Geographic location o Product usage o 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 Objectives Criteria for Defining Objectives: 1. Specific Target Audience 2. Specific Tasks 3. Specific Changes 4. Specific Time Copyright 2013 Pearson Canada Inc.
Promotions Opportunity Analysis Broad categories of objectives may include: o Develop brand awareness o Increase good/service category demand o Change customer beliefs or attitudes o Enhance purchase actions o Encourage repeat purchases o Build customer traffic o Enhance firm image o Increase market share o Increase sales o Reinforce purchase decisions
CREATE A COMMUNICATIONS BUDGET Step 3
Promotions Opportunity Analysis Step 3: o Establishing a Communications Budget o Budgets are based on o communication objectives o 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 communication o Threshold effects o Carryover effects o Wear-out effects o Decay effects o Random events
F I G U R E 4. 7 A 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. 8 A Decay Effects Model
o Percentage of sales o Meet-the-competition o “What we can afford” o Objective and task o Payout planning F I G U R E 4. 9 Methods of Determining Marketing Communication Budgets