Factors in Setting Promotional Marketing.
1. Product Market
Consumer goods are easy to sell as it is relevant to consumers demand and spending. However, with intense competition in this industry, it is necessary to make emphasis on sales promotion to provide incentives and discounts prior advertising, which aims to build brand awareness and remind customers of its benefits. Industrial goods have minimal market share, and in order to promote this to the market, it requires strong personal selling to deliver the message, informs prospects and customers, and answers queries regarding the product.
2. Push Strategy
Companies need to know the promotional strategy appropriate for their target market product. Push strategy is suitable for products with low-brand loyalty. Manufacturers directly deliver the products to intermediaries then the store or shop use strategies, such as sales promotion, personal selling and direct marketing to reach customers. Pull strategy is appropriate when people distinguish the difference of your product from other brands, creating loyalty and relatively high market share. Strategies include advertising, publicity and consumer promotion.
3. Buyer Readiness Stage
Cost effectiveness of different promotional tools at different buyer readiness stages must be taken into consideration. Customer awareness is primarily affected by publicity and advertising. Comprehension is where customers like buying a product, and it is pushed through with effective advertisements and personal selling. Conviction comes next wherein the buyer had decided to purchase the product, and it is mostly influenced by sales talk, information thread and others. Closing a deal or ordering is initiated by sales promotion and personal selling. Then, repurchasing of products and services is caused by customer satisfaction and brand loyalty. It is influenced by sales promotion, personal selling and advertisements that intend to remind customers to keep using their products.
4. Product Life Cycle
Companies should implement the right promotional tool or combination of strategies for each life cycle of a product. The need for promotional marketing not only depends on the message and budget, businesses should also consider when is the right time to implement those strategies, for how long and how intense the promotion will be.
Start up businesses introducing a brand new product or service use advertising to build product awareness, heavy sales promotion to entice trial and direct marketing to target quality prospects. At this stage, business can make use of rapid skimming strategy, wherein the firm charges a high price in order to profit per unit and cost. They spend heavy on promotion to convince the market of their product features and benefits even at a high price. Low skimming strategy is applicable when the market is not limited to size, and potential competitor is not imminent as its promotion is low but its price is high. Strategy of using high promotion and high-pricing promises to bring fastest market penetration and largest market share.
Companies at their growth stage, experiencing rapid rising sales and profits, extend their product line and services should maximize market share by building interest and awareness in the mass market. This can be done with average advertising for additional product and services. Promotion can be reduced to take advantage of heavy consumer demand.
Businesses at maturity stage, where there is more frequent product use, sales growth rate starts to decline should diversify their brands and models use advertising to stress brand core competencies, and increase sales promotion to encourage nonusers to switch brands. Companies will phase out weak items, cut prices for selling, and reduce promotion strategies to the minimal level.
Winning companies focus and pay much attention to their promotional marketing as this corresponds to customer needs economically and efficiently. They can opt solution for customers’ demands; they can communicate with them, provide certain platforms to make it profitable, and influence prospects and customers behaviour turning market awareness to trial, purchase and conviction. Aside from budget, communication message, timing and medium to be used, companies must also consider factors in setting promotional marketing, such as type of product market, push or pull strategy, buyer readiness stage, product life cycle and company market rank.
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