mm2 written report

7/28/2019 MM2 Written Report

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SALES PROMOTIONS STRATEGY

Promotions have four elements called the Promotions Mix:

1. Advertising- to effectively inform and persuade target market.

2. Public Relations- to offer a positive image of the company and the brand.3. Selling- to get the customers to buy.

4. Sales Promotions- to convince customers to buy immediately.

Characteristics of Sales Promotion

1. Temporary

Sales promotions are conducted on short durations.

2. Better Value

As similar products are looked at in a similar sense, sales promotions are used to

create short-term product differentiation via offering a better product value.

3. Beneficial

Sales promotions promote growth, sometimes however, even at an artificial level.

This growth benefit can be attained for different objectives such as generate or

increase product trial, or increase purchase quantity.

Sales promotions are often referred to as the product PUSH because they resort toa direct shorter term objective to gain customers, whereas advertising is often referred

to as the product PULL because it takes an indirect longer-term approach to gain

customers.

TRADE PROMOTIONS

Trade promotions are designed to convince trade channels like retailers and wholesalers

to buy immediately, or to buy more than their usual quantity.

Examples of Trade Promotions

1. Cooperative Advertising

As the term implies, cooperative advertising happens when supplier and his trade customers

share in paying for an advertising campaign, usually featuring the product of the supplier

exclusively or among other products.



2. Cooperative Promotions

Cooperative promotions, when based on sales, and most specially when based on

incremental; sales, are better than cooperative advertising. This is because of the variable cost

involved unlike the fixed cost of nature of cooperative advertising.

3. Discounts and Terms

Discounts are straight deductions from the list price. It may come in the form of prompt

payment discount for the payments made on time, or an introductory discount for a new product

launched, or volume discounts designed to build inventories with the trade, among many other

possible discounts.

4. Display Allowance

Display allowances are financial support granted to the trade outlet for the performance of in-

store display requirements.

5. Free Products

Free products promotions involve giving of additional quantity of products on top of regular

purchase volume. Giving free products such as one bag of every ten bags purchase is better than

giving cash or its equivalent such as a 10% discount.

6. Trade Contest

Goldstar appliances once launched their best window display contest in 1991 after

sponsoring a seminar on window display to the artists of their appliance retailers. Sony and

Sharp, on the other hand, provided prestige to their outstanding dealers by honoring and

featuring them in whole-page newspaper announcements. Companies with new products may

also launch a “Best New Product Presentation” campaign among stores.

7. Rebates/Rewards

Marketers may offer year-end rebates as a token of appreciation for the loyalty of their

dealers. This enables bigger retailers to sell some of their products at cost and aim for the rebate

expected at the end of the year for pre-agreed volume purchases.

8. Push Pin Money

A variety of rewards promotions is Push Pin Money which is money given to the salesclerks

of the dealers (and frequently including the dealers themselves) to push the firm’s products.



9. Personality

Mystery buyer is an example. If the saleslady of the trade store will recommend the specific

brand of your company, she is entitled to an incentive. Usually, the trade outlet will also get

some incentive to reinforce the effectiveness of the personality contest.

10. Exhibits

Joining exhibits and tradeshows is a cost-effective way to create awareness, and generate

sales leads, most specially for business-to-business products and high priced consumer durables.

11. Conferences/Training

Conferences and training are promotions which advance goodwill with the trade.

CONSUMER PROMOTIONS

Consumer promotions are designed to convince end-users to buy immediately or to buy

more than their usual quantity.

1. Sampling

Sampling is a limited amount of the free products offered to consumer. It is usually given in

the store, via door-to-door, by mail, thru another product, or in places where target markets are

located.

2. Coupons

Coupons are certificates entitling the bearer to a published saving on the purchase of a

specific product. Since the come-on is savings, the amount consumers can save must be

significant (say at least 5 to 12%) to be attractive.

3. Price-Off

Price-offs are promotions that offer immediate savings upon purchase. “Anniversary Sale

“where products are offered at a lower price within a limited duration is an example of price-off promotions.

4. Rebates



Rebates are like coupons except that the price reduction is usually larger and are given

after the purchase rather than at the point of sale.

5. Bonus Packs

Bonus packs involve giving extra quantity of the same product without increase in price.

Detergents and juice drinks with bonus packs,.i.e. free 20 grams more, in the super market are

common examples.

6. Sample Packs

Sample packs involve trial size of a product at a price usually lower than market standard.

It may sometimes involve special trial size packaging like a smaller bottle of perfume or a

sample of toothpaste.

7. Special Packs

Products combined as single packs can bring savings for consumer. Coherence is the key.

Marketers for instance can find a combined Happe Toothbrush and Happe Toothpasdte special

pack effective but not when Happe Toothpaste and shoe brushes are combined for obvious

reason.

8. Premiums

Premiums are free gifts offered as incentive to purchase a particular product. By far, this

remains the most popular sales promotional scheme in the Philippines as it provides immediate

value to the consumers without dropping price.

9. Self – Liquidating Promotions



Jollibee and McDonald’s are probably the most popular marketers of self -liquidating

promotion which sell merchandise like toys to consumers 20% to 30% below its normal retail

price. As the term self-liquidating implies, the marketers can recover all his expenses for the

promotion, and sometimes even experience profit.

10. Free Trial

This type of promotions invites prospective customers to try the product without cost in

the hopes that they will buy the product. The free trial concept will be most effective when there

is a high risk perception associated with the product such as a newly launched innovation

11. Warranty

Warranty reduces the risk factor in a purchase, most especially for high involvement or

high-priced products and service. Automatic center is famous for their money refund warranty in

case customers can show that the same product they brought is being advertised at a lower price

within a specified duration.

12. Prizes

Consume may be offered an opportunity to win a prize after purchasing product.

Patterned after after “Jeuteng”, consumer at the chance to win up to one million pesos if the

three-digit number in the Pepsi crown will be announced as the winning number.

13. Patronage Reward



Consumer may be given an incentive in promotion to the volume of product regularly

purchased. Airline, for instance, have their frequent flyer program when mileage earned can be

exchanged for free Trips

14. Contest

Contest are promotions given to consumers to have a chance of winning something of

value. Consumers may be able to join a contest by submitting entries either with or without proof

of purchase of a product.

15. Personality

“Mystery Visitor” is a common is a common form of personality promotion this entails

the consumer to show the product of the company of the mystery visitor to win a prize.

SALES PROMOTION PLAN

Like any project, a sales promotion needs a written plan. This is to ensure that all

elements of the sales promotion are defined and agreed upon.

1.) Title This is name given to the sales promotion

2.) Objective Objectives answer the question “why are you having a sales promotion? “This means that

no sales no sales promotion should be implemented if no improvement will be experienced

objective also answer the question “what problems do you want to solve?

Objectives are defined to determine the intensity of strategies and tactics. They must be

concrete and clear to the marketer.



SMART OBJECTIVES

Specific – not vague

Measurable – than can be quantified

Attainable – and not overly ambitious

Realistic – and must consider constraints

Trackable – with checkpoints capable of being monitored to ensure improvement.

3. Coverage

Coverage defines the specific territories included in the sales promotion. When not all of

the territories are included in a sales promotion, there is a possibility of exceptional increase in

the sales volume of a territory (Say San Pablo) included in the promotion rear another territory

(Say Naga) included in the promotion.

4. Duration

Duration identifies the length of the promotion. The time period involve in a sales

promotion is very important. If it’s is two short, many prospects may not be able to join. On the

other hand, if it is too long, the urgency characterizing a sales promotion objective may be lost.

5. Of f er

An offer identifies the type and size of promotion to be executed. The size of the offer

must be reasonable and attractive for their customers to join. A balance must be made between

reasonable and attractive.



6. Mechanics

This section identifies approaches to the achievement of objectives it includes how the

promotions will be implemented, the conditions for participation, the detail logistics needed, who

is responsible for what and a contingency in case unexpected things would happen.

7. Communications

How to communicate the sales promotions at the start, during, and after the promotions

duration is as important as the sales promotions itself. The communication should motivate thetarget consumer to say “I want it!”

8. Key factors for success

1. Strong trade support

2. A short promotion period

3. A high level of incentives4. Dual promotions

5. The support of salesforce and the trade

9. Budget

The cost to promote section is critical. Marketers must answer questions like “will share

and profit increase?

Cost effectiveness must include an analysis of loyal customers who will get a free

subsidy during the promotion.

The two most common ways of establishing sales promotion budget are:

1.) Objective – taste method, and2.) Percentage of sales method



The objective task method involves first and foremost, a definition of the promotions

specific objectives followed by a list of tasks to be done to achieve these objectives, and finally

quantifying the budget needed to perform this task.

Percentage of sales method, on the other hand pegs a specific percent of sales

promotional budget to anticipated sales. This encourages the marketer to think in terms of the

relationships between promotion cost, and profit per unit.

ADVERTISING STRATEGY

Advertising is a PULL strategy in contrast to sales promotions which is a PUSH strategy.

Advertising serves several purposes. It could be:

1. Brand advertising, which aims to stimulate demand for particular brand.

2. Institutional advertising, which aims to develop goodwill for a company or industry.3. Classified advertising, which aims to inform prospects regarding opportunities such as

buy and sell, events, and employment.

4. Promotional advertising, which aims to inform prospects about promotional activities

such as special sale.

5. Advocacy advertising, which aims to convince audience regarding a particular cause.

Advertising Objectives:

Before any advertising program can be set, the advertising objective or objectives must

be set. These advertising objectives must be relevant to the existing market situation.

Advertising Objectives

TO INFORM target customers about:

1. New product

2. Product function

3. Correct usage4. New uses

5. New distribution



6. Price adjustment

TO PERSUADE target customers about:

1. Brand preference

2. Brand switching

3. Urgency to buy now4. Action to be taken ( phone-in inquiry)

Advertising Mix

Advertising decisions to be decided before an advertising program can be implemented.

These decisions are usually made after the target market and the advertising objectives have

already been defined.

1. WHAT to say (message)

2. HOW to say (copy execution)3. WHERE to say (media selection)

4. WHEN to say ( media scheduling)

Other critical questions are:

5. HOW MUCH to spend which we will discuss in the advertising budget section, and

6. HOW to measure effectiveness of results which we will discuss under the advertisingtesting section.

Positioning

Positioning is the act of communicating to consumers the overall positive impression for

brand, relative to the competition. Positioning is like a woman dressing up beautifully to be

different from all the rest.

Repositioning

Repositioning is done to change the past perceptions of the target consumer. As a general

rule, the more extreme the change, the more difficult the repositioning is likely to be.

*Repositioning has two concepts.



1. The first one is changing an old brand positioning to a new brand positioning.

2. The second one attempts to change consumer perception of competitors.

COPY STRATEGY

The following are the stages in creating advertising:

1. Preparation of copy strategy and or brief from which the creative team must work.

2. The creative process itself where the output is a storyboard (similar to a comic strip) inthe case of a TV advertisement; and script (with or without jingle) in the case of

commercial.

3. Evaluation of the creative output. This could be a combination of logic, research and judgement.

Copy Brief

Copy brief or copy strategy is basic proposition, consumer promise, or statement of benefit.

It includes the product features and proof (or “reasons why”) that justify the proposition so as to

make the proposition as convincing as possible.

Copy brief also includes the tone of voice in which the message should be delivered (in case

of TV or radio advertisements) which includes the brand image to be projected, and frequently

the consumer image, or the picture the brand user has of himself.

Guide questions are very important before a copy brief can be written.

They are:

1. Brand Overall Objective

Is our objective to create new uses, or more usage for our brand?

2. Target Market

What is the demographic and psychographic profile of the primary and secondary

target market we plan to reach?

3. Diagnostic Positioning

In terms of competitive standing, what attributes are important to the customers

where we have the advantage?

4. Factor influencing product purchase



This answers the where, how, how often, size, variants bought as can be gathered in a

usage, attitude, and interest (UAI) survey.

Advertising Execution

Advertising message can be presented in at least 9 execution styles as follows:

1. Slice Of Life

This shows one or more persons using the product in a normal setting.

2. Scientific Evidence

Colgate has been using scientific and, laboratory evidences in promoting their

product’s relative superior performance against competition.

3. Testimonial Evidence

A closely associated evidencing format is the testimonial approach where a credible

individual or group would endorse the company’s product.

4. Technical Expertise

This shows the company’s expertise and experience in making the product. Nissan

“ECCS” advertisement is an example of technical expertise.

5. Lifestyle

Emphasizing on how a product fits in with a lifestyle, luxurious restaurants like Dona

Nena, and Mario’s would emphasize not only on the restaurants good food but thecozy ambience as well.

6. Fantasy

Fantasy is created around the product or its use.

7. Image

Bench shirts make use of image without explicitly claiming anything about their

product except by suggestion.

8. MusicalBackground music or the ad talent would be shown singing a song involving the

product.

9. Personality Symbol

This associates a person to a product. For instance, cowboys are closely associated

with the Marlboro brand.



MEDIA PLAN: WHERE and WHEN to advertise

Exposure (E) is the placement in a media vehicle such as TV, radio, print newspapers,

magazines, that the target audience is known or expected to see, hear, or read. Exposure createsawareness. To find the most cost-effective media to deliver the desired awareness.

To find the audience, three important and interrelated exposure variables must be

considered:

1. Reach (R) or the number of consumers exposed to a particular advertising at least

once during the specified duration.

Reach is composed of two types:

a. Registration – or people who correctly recall and playback something

meaningful

b. Recognition – or people who could not playback anything meaningful, but

recognize the advertisement.

2. Frequency (F) or the number of times consumers are reached. This is bases on the

idea that consumers normally have to be exposed to a band’s advertising a number of

times, written a purchase cycle, before an advertising can influence purchase.

3. Impact (I) or the qualitative value of an exposure though a given medium size. Impact

goes beyond recall and make consumer interested in the brand.

Gross Rating Point (GRP) and Cost per Thousand (CPM)

Gross Rating Point or GRP is the result of combining Reach(R) and Frequency (F).

Thus, E = R x F. If a giving media plan reaches 60% or the homes with an average frequency of

10 in a week, the media plan is said to have a GRP of 600 points (60 x 10) for that particular

week.

Cost per thousand (CPM) is a term used to compare the cost effectiveness of various

media. It is the media cost of gaining exposure to 1,000 persons with an advertisement.

PEOPLE METER

Most ratings of TV shows are done using 110 of each AB, C, and DE households (total

330) as TV rating panel. Panel member’s record in a specially designed diary with a fifteen

minute interval the TV shows they watched. The designed diary a fifteen minute interval the TV



shows they watched. The research company representative then gathers these diaries on a daily

or weekly basis.

ADVERTISING TESTING

There are many ways to test effectiveness of advertising materials.

0ne advertising research model available is called the BUY TEST, developed by Dr.

Milton Sherman of Sherman Group Inc of New York, is handled in the Philippines by Frank

Small and Associates. BUY TEST measures consumer response to broadcast and occasionally

(because of cost), to print advertising.

The BUY TEST utilizes a one - on- one interview technique with a minimum of 130

respondents per advertising material to be tested. Each consumer reacts to only one

advertisement. The BUY TEST divides consumer response into three distinct categoriesfollowing three questions marketers always ask about their advertising. Those questions are

reflected in the BUY SCALE.

BUY TEST BUY SCHALE

Recall

The first step in the BUY TEST is to determine the extent of understanding of the visual

as well as the copy elements of the advertisement. An understanding of what the advertising

says, shows or implies, however, does not automatically make the respondents of this level have

an interest or a desire of owning or using the product or service advertised.

Involvement

The feelings or Involvement stage seeks to determine the levels of consumer emotional

reactions to the advertisements, plus their own interpretation of its visual and copy elements.

Persuasion

Consumers reaching the Persuasion stage demonstrate a high commitment to the product

with a burning desire to act on the advertising message.



Written Report

In

MM2

(MARKETING MANAGEMENT)

Vargas, Jessa

Corvera, Mae

Pazo, Merasol

Alvarez, Cherry Joy



3MMA

MWF/9:00-10:00 a.m.

mm2 written report

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