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Product promotional method & its quantitative analysis

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1. Introduction

A business person has to keep on thinking almost all the time. He has to think not only about the

profit and loss of his business but also about expanding the business. Businesses have to keep on

growing in order to stay in competition for a long time. The growth is only possible when a

business is getting more return for its efforts than the amounts it is spending. When a business in

running condition, it is easy to do analysis on what’s working for it and what’s not. With this data

the business person can create new promotional approaches.

Promotions are the attractive offers that businesses offer to their customers only for a limited time.

During this limited period the company has to tie some goals and targets to its efforts. A business

can’t run a promotion without setting targets. So if a promotion is launched without a particular

aim, the businesspersons will never know how successful the promotion was. It has to be

mentioned here that business have to repeat their promotions and they can only do so when they

know what promotions were most productive for them.

The most important purpose of promotion is that, it sets a business apart from its competitors. No

business will ever need to run any promotions if there wasn’t any competition. If a specific

company sells similar products or services like all others out there, then that specific company can

only make customers to buy from them if they have a special promotion going on. Also it is equally

important to spread the word about the promotion to the people by using several advertising and

marketing methods.

Promotion also allows the company owner to make use of the available data and create more useful

data from it. As the company continue to do business, they can collect information of thousands

and millions of customers. By using the right database enquiries, they can know the trends, patterns

and inclinations of the customers. By using that data, they can launch targeted promotions. By

further collecting data of the promotion they can know their customers better. When they know

them better, they can launch more successful promotions. In addition to that, when there is

something available only for a limited time, customers are like to talk about it. When they talk

about those promotions, they become the advocate customers and more customers becoming

interested in doing business with them where branding enters as a handy tool for making the

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customers remember about the products. By launching promotions frequently, it becomes easy to

stay in the memory of the customers & whenever a customer feels like buying new stuff he/she

will think of checking that company’s promotion to see if there is a promotion going on or not.

2.1 What is promotion?

Promotion is advertising a product or brand, generating sales & creating brand loyalty. [1]

Or,

Promotion involves disseminating information about a product, product line, brand, or company.

It is one of the four key aspects of the marketing mix. (The other three elements are product

marketing, pricing, and distribution.)

Or,

To generate sales and profits, the benefits of products have to be communicated to customers which

is known as “promotions”. [2]

2.2 What is product promotion?

Simply we can say that, ‘Creating buzz around product with an aim to sell it.’ [3]

To address 4 strategic questions:

i. What are the objectives?

ii. What product is to be offered?

iii. Who is the target audience?

iv. What is the communication to motivate the target audience buy the product?

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3. Creating a promotional Plan

Figure-1: Creating a Promotion plan.

4.1 Promotional objectives

Setting promotional objectives will help to meet broader marketing and organizational objectives.

Promotional programs can be built around a single objective or multiple objectives.

1) Informing:

The basic objective of promotion is providing information. It is done to tell potential customers

about the company as well as what products are available, where they can be purchased and for

what price.

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2) Increasing sales:

Encouraging prospective customers to purchase products is the most common promotiona l

objective. Using advertisements and other methods company attempts to persuade customers to

try new products, remind them of the benefits of products and reinforce their choice of particular

brands.

3) Stabilizing sales:

Continuation of promotional activities to reduce or eliminate substantial variations in demand

throughout the year seasonal products promotion must be taken into account.

4) Positioning the product:

Promotional effort to position a product as different or superior to competing products. Positioning

means emphasizing certain product features to create specific image for the product and add to it s

appeal.

5) Building a public image:

Sometimes a company wants to develop a certain image through promotion. In that case via

successful promotion a good public image of the company can be made. [4]

Figure-2: Goals and Tasks of Promotion.

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4.2 Promotional mix

The Promotion Mix refers to the blend of several promotional tools/methods used by the business

to create, maintain and increase the demand for goods and services.

The fourth element of the 4 P’s of Marketing Mix is the promotion; that focuses on creating the

awareness and persuading the customers to initiate the purchase. The several tools that facilitate

the promotion objective of a firm are collectively known as the Promotion Mix.

Figure-3: Elements of the Promotion Mix.

5. Promotional methods

5 main methods of promotion. They are:

Advertising

Personal Selling

Sales Promotion

Public Relations and

Direct Marketing.

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Advertising:

Kotler and Armstrong provided a definition for that:-

"Advertising is any paid form of non-personal presentation and promotion of ideas, goods and

services through mass media such as newspapers, magazines, television or radio by an identified

sponsor"

That means, advertising is any paid form of non-personal presentation and promotion of goods and

services by the identified sponsor in the exchange of a fee. Through advertising, the marketer tries

to build a pull strategy; wherein the customer is instigated to try the product at least once. The

complete information along with the attractive graphics of the product or service can be shown to

the customers that grab their attention and influences the purchase decision. [11]

Five “M”s in advertising are:

Mission-objectives

Money-budget

Media-what media

Message-what message

Measurement-evaluation

Figure-4: Major Types of Advertising.

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Advantages:

• Creating awareness.

• Increase sales & loyalty.

• Brand identity & Brand image.

• Increase the buzz value &

• Contact and influence masses.

• Deliver specific message to specific target segment.

Disadvantages:

Even good advertising can’t overcome problems caused by-

o Poor product

o Inefficient service

o Uncompetitive pricing

Less effective than personal selling and sales promotion

Less flexible than personal communication (no media to answer the query) [5]

Cant evaluate the message effectiveness and the response

Unable to reach the prospect, so the cost of repetition increases

Many times lack credibility and worthiness.

Personal Selling:

Personal selling is oral communication with potential buyers of a product with the intention of

making a sale. The personal selling may focus initially on developing a relationship with the

potential buyer, but will always ultimately end with an attempt to “close the sale”.

Personal selling is one of the oldest forms of promotion. It involves the use of a sales force to

support a push strategy (encouraging intermediaries to buy the product) or a pull strategy (where

the role of the sales force may be limited to supporting retailers and providing after-sales service).

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Advantages:

Pin-points Prospects.

Meet objections.

Close encounter of the product.

Time saving.

Disadvantages:

Messages maybe inconsistent.

Cost is often extremely high.

Reach maybe very limited. [6]

Possible management-sales force conflict.

Sales Promotion:

The sales promotion is the short term incentives given to the customers to have an increased sale

for a given period. Generally, the sales promotion schemes are floated in the market at the time of

festivals or the end of the season. Discounts, Coupons, Payback offers, Freebies, etc. are some of

the sales promotion schemes. With the sales promotion, the company focuses on the increased

short term profits, by attracting both the existing and the new customers.

Advantages:

Increased buying confidence customer.

Increased retention.

Increased repeat purchase. [7]

Increase brand switching.

Good short term promotional tool.

Provide quicker results.

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Disadvantages:

Increased price sensitivity.

Quality image may be affected.

Merchandising support.

Dealers will take up undue advantage.

Short term sales orientation.

Figure-5: Tools for Consumer Sales Promotion. Figure-6 : Tools for Trade Sales Promotion

Public Relations:

The marketers try to build a favorable image in the market by creating relations with the general

public. The companies carry out several public relations campaigns with the objective to have a

support of all the people associated with it either directly or indirectly. The public comprises of

the customers, employees, suppliers, distributors, shareholders, government and the society as a

whole. The publicity is one of the form of public relations that company may use with the intention

to bring newsworthy information to the public. E.g. Large Corporates such as Dabur, L&T, Tata

Consultancy, Unitech and PSU’s such as GAIL, and NTPC have joined hands with Government

to clean up their surroundings.

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Advantages:

Credibility. [8]

Low cost.

Image building.

Get over consumer resistance.

Disadvantages:

Lack of control over materials.

Measurement is difficult.

Space aren’t guaranteed.

Figure-7: The tools of Public Relations.

Direct Marketing:

Direct marketing has been defined by the Institute of Direct Marketing as:

“The planned recording, analysis and tracking of customer behavior to develop a relational

marketing strategies”.

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With the intent of technology, companies reach customers directly without any intermediaries or

any paid medium. The e-mails, text messages, Fax, are some of the tools of direct marketing. The

companies can send the emails and messages to the customers if they need to be informed about

the new offerings or the sales promotion schemes. E.g. The Shopperstop send SMS to its members

informing about the season end sales and extra benefits to the golden card holders.

The process of direct marketing covers a wide range of promotional activities, these include:

• Direct-response adverts on television and radio.

• Mail order catalogues.

• E-commerce.

• Magazine inserts.

• Direct mail.

• Telemarketing.

Advantages:

Focus limited resources on targeted promotion.

Can personalize the marketing message.

Relatively easy to measure response and success.

Cost-effective if customer database is well managed.

Disadvantages:

Response rates vary enormously.

Ineffective campaigns can be costly.

Negative image of junk mail and email spam.

Databases expensive to maintain and keep accurate. [9]

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6. Factors influencing promotion mix

Nature of the product.

Marketing strategy.(push or pull).

Buyer readiness stage.

Product life cycle stage.

7. When Promotional elements are useful

Figure-8: When elements of Promotion Are Most Useful.

8.1 Why quantitative analysis is needed

1. Understanding the customer:

By using the quantitative analysis we can understand how customers use the product or service.

This will give a data points that back up what value we think we would give to customers based

on what features they use most often. We can find out not just who the habitual users are, but how

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often they use certain features and which features they use. And according to this we can select

the suitable promotional method.

2. Basic traffic reporting:

We can find out where most of our website traffic is coming from by using quantitative analysis.

Through google analytics, we can figure out where the organic search requests come from and

which specific media channels are bringing in the most people. And according to this we can select

the suitable promotional method.

3. Conversion funnel:

By using quantitative analysis, when we are trying to identify where customers abandon our

conversion funnel, we can use that data to create a strategy to improve certain steps of the funne l

so we can increase the overall conversion rate. And according to this we can select the suitable

promotional method. [10]

8.2 Useful tools for Quantitative analysis

Qualaroo

Kissmetrics

Typeform

Google analytics

Crazy Egg

SurveyMonkey

YesInsights.

Other includes:

Sales figures.

Industry product sales numbers.

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Financial trends.

9. Conclusion

Quantitative research often produces a lot of statistics which are useful as an overview of the

market to choose the suitable promotional method but we need to make sure that we don’t rely

solely on statistics of the research. Rather consider all the information from the collection which

will eventually help us to decide the best one among all.