Imagine you are an organization trying to go global or expand. You have carefully planned how your business will enter the new market, have developed the right product or service, and believe you can offer it for a price that will be profitable. However, until you actually get to the real action and start selling your product, you need to take care of one important part of your business without which your business would not actually function, namely, your customers.
How an organization chooses to promote their products and services can have a direct and substantial impact on sales. There is much thought and consideration that needs to go into how dollars spent on advertising and promotions will convert into revenue for the company.
Therefore, once you have reached this step in your business plan you have to start building your promotional mix. The basic purpose of the promotional mix is first of all to create brand awareness but the most essential is to produce organizational goals and profits. A promotional mix is defined as being successful if you manage to deliver a clear, compelling message based on the fact that you chose the most appropriate promotion method.
The promotional mix generally involves 5 components such as
1. Personal selling
3. Direct marketing
4. Sales promotions
5. Public relations
1) Personal selling
It is a part of the promotional mix which involves a one to one communication between buyers and customers (either potential or already customers). As it is a one-to-one communication, it generates direct contact with prospects and customers. Even though it is considered to be one of the most expensive forms of promotion, it is also considered to be the most successful as a seller-buyer relationship can be created and developed.
One of the key factors in the promotional mix, which contributes to brand building and also how the market perceives the company, is advertising. It is always a big part of the promotional mix because of the far and wide reach of advertising and the message that you can send to your existing and potential customers. Good advertising can build a solid brand for the company. On the other hand, bad advertising with a wrong message, can cause the brand or product to fail.
3) Direct marketing
While advertising targets a mass-audience, direct marketing targets prospects and customers. Social media marketing, Email marketing, Internet marketing are all types of direct marketing used by companies. They have become important in the promotional mix lately because people are using internet far more than they used to a decade back. Company’s employ direct marketing in order to engage in one-way communication with its customers, about product announcements, special promotions, order confirmations as well as customer inquiries.
4) Sales promotions
Sales promotions are one of the most common types of promotion used by companies. Their main purpose is to stimulate purchasing and sales. While it has the potential of increasing sales, it is also beneficial for informing prospects about new products on the market or just to recapture old or lost customers. Such examples include: coupons, product samples, etc.
5) Public relations
Lastly, public relations enable an organization to influence a target audience and through this, create a favorable and positive image for the company. The company tries to connect with the audience by sharing information with them about the company and about the product. If anything goes wrong on the information front, the public relations department has to step forward and rebuild the public image.
While establishing your own promotional mix, you need to consider and decide upon several factors:
1. Determine which is your target market – in terms of which customers’ needs you are going to fulfill through your products while understanding the attitudes and behaviors of your targeted customers
2. Determine your objective – more precisely, what are you expecting to get one your promotion mix is implemented.
3. Design your message in terms of content and format.
4. Select your promotional channels.
5. Determine your budget.
6. Determine your promotional mix.
7. Measure the results of the implemented program and make the necessary adjustments if needed.
In order to succeed with your promotional mix, it would be a good idea to take a look at what your competitors are doing. This does not imply that you copy them as it will not help you at all since each company has its own identity. Monitoring their ads, promotions and special events might provide you with a guide of how to promote yourself and differentiate yourself through the promotional mix.
Advantages and Disadvantages of Each Element of the Promotional Mix
|Advantages and Disadvantages of Each Element of the Promotional Mix Mix Element||Advantages||Disadvantages|
|Advertising||Good for building awareness
Effective at reaching a wide audience
Repetition of main brand and product positioning helps build customer trust
|Impersonal – cannot answer all a customer’s questions
Not good at getting customers to make a final purchasing decision
|Personal Selling||Highly interactive – lots of communication between the buyer and seller
Excellent for communicating complex / detailed product information and features
Relationships can be built up – important if closing the sale make take a long time
|Costly – employing a sales force has many hidden costs in addition to wages
Not suitable if there are thousands of important buyers
|Sales Promotion||Can stimulate quick increases in sales by targeting promotional incentives on particular products
Good short term tactical tool
|If used over the long-term, customers may get used to the effect
Too much promotion may damage the brand image
|Public Relations||Often seen as more “credible” – since the message seems to be coming from a third party (e.g. magazine, newspaper)
Cheap way of reaching many customers – if the publicity is achieved through the right media
|Risk of losing control – cannot always control what other people write or say about your product|
Market segmentation is one of the oldest marketing trick in the books. With the customer population and preferences becoming more wider, and the competitive options becoming more available, market segmentation has become critical in any business or marketing plan. In fact, people launch products keeping the market segmentation in mind.
There are three ways to classify what the customer wants. It is known as needs, wants and demands. However, to decide the needs, wants and demands, you need to carry out segmentation first. And in segmentation, the first step is to determine which type of customer will prefer your products. Accordingly, that customer will be from your targeted segment. Who would want your product and whether it falls in the needs segment, the wants segment or the demands segment. Once you decide the product you are going to make, then you decide on the market segmentation.
When it comes to market strategy and email campaigns, organization is the key to success. Market segmentation breaks down your target market into smaller, more manageable groups. Market segmentation enables companies to better serve customers by identifying and marketing different products and services to different consumer sets. Listed below are several examples of market segmentation that will help CMOs and marketing directors create more personalized customer experiences.
Examples of Market Segmentation
Demographic sets are the most common form of segmentation based on customer traits.
The most common demographic sets are:
There are many common segments within the clothing industry, for example—including men and women, fashionable, thrifty, conservative, casual, and business.
Where your customers live dictates the products and services that benefit them the most.
Common geographic segmentation includes:
Also known as psychographics, lifestyle targeting is geared toward understanding hobbies and interests.
For example, musician customers can be segmented into commercial, retail, drums, live sound, guitars, professional, beginner, collector, live sound, or recording.
Big Data has been a key determining factor in identifying behavioral segmentation. Customer records show buying patterns over time that could prompt promotions and sales based on spending habits of particular brands. This is a unique, personalized customer experience tailored directly to the consumer.
Behavioral traits include:
Patterns of use
Cost-effectiveness is a key determinant of behavioral statistics. High-income products and low-income products can be broken down into further marketing segments.
For example, restaurant market segmentation can be broken up into regulars, business lunch, brunch, fast food, upscale dining, and catering.
Benefit segmentation seeks to identify the specific benefits a customer is seeking from a product.
Benefit segmentation includes:
For example, deodorant segmentation can be broken up into needs for medical, fragrance, sport, organic, feminine, or masculine
Definition of Marketing
According to American Marketing Association, “Marketing is an organisational function
and a set of processes for creating, communicating and delivering value to customers and for
managing customer relationships in ways that benefit the organisation and its stakeholders.”
Definition of Management
According to Harold Koontz, “Management is the art of getting things done through and
with people in formally organised groups.”
Management consists of the interlocking functions of creating corporate policy and
organising, planning, controlling, directing an organisation’s resources in order to achieve the
objectives of the policy.
Definition of Marketing Management
According to Philip Kotler, “Marketing Management is the analysis, planning,
implementation and control of programmes designed to bring about desired exchanges with
target audiences for the purpose of personal and of mutual gain. It relies heavily on the
adoption and coordination of product, price, promotion and place for achieving responses.”.
Marketing management is a business process, to manage marketing activities in profit
seeking and non profit organisations at different levels of management. Marketing
management decisions are based on strong knowledge of marketing functions and clear
understanding and application of supervisory and managerial techniques.
Nature of Marketing Management
It Combines the Fields of Marketing and Management
As the name implies, marketing management combines the fields of marketing and
management. Marketing consists of discovering consumer needs and wants, creating the
goods and services that meet those needs and wants; and pricing, promoting, and delivering
those goods and services. Doing so requires attention to six major areas – markets, products,
prices, places, promotion, and people.
Management is getting things done through other people. Managers engage in five key
activities – planning, organising, staffing, directing, and controlling. Marketing management
implies the integration of these concepts.
Marketing Management is a Business Process
Marketing management is a business process, to manage marketing activities in profit
seeking and non profit organisations at different levels of management, i.e. supervisory,
middle-management, and executive levels. Marketing management decisions are based on
strong knowledge of marketing functions and clear understanding and application of
supervisory and managerial techniques. Marketing managers and product managers are there
to execute the processes of marketing management. We, as customers, see the results of such
process in the form of products, prices, advertisements, promotions, etc.
Marketing Management is Both Science and Art
“Marketing management is art and science of choosing target markets and getting, keeping
and growing customers through creating, delivering and communicating superior customer
value.” (Kotler, 2006). Marketing management is a science because it follows general
principles that guides the marketing managers in decision making. The Art of Marketing
management consists in tackling every situation in an creative and effective manner.
Marketing Management is thus a science as well as an art.
Nature of Marketing
1. Marketing is an Economic Function
Marketing embraces all the business activities involved in getting goods and services , from
the hands of producers into the hands of final consumers. The business steps through which
goods progress on their way to final consumers is the concern of marketing.
2. Marketing is a Legal Process by which Ownership Transfers
In the process of marketing the ownership of goods transfers from seller to the purchaser or
from producer to the end user.
3. Marketing is a System of Interacting Business Activities
Marketing is that process through which a business enterprise, institution, or organisation
interacts with the customers and stakeholders with the objective to earn profit, satisfy
customers, and manage relationship. It is the performance of business activities that direct the
flow of goods and services from producer to consumer or user.
4. Marketing is a Managerial function
According to managerial or systems approach – “Marketing is the combination of activities
designed to produce profit through ascertaining, creating, stimulating, and satisfying the
needs and/or wants of a selected segment of the market.”
According to this approach the emphasis is on how the individual organisation processes
marketing and develops the strategic dimensions of marketing activities.
5. Marketing is a social process
Marketing is the delivery of a standard of living to society. According to Cunningham and
Cunningham (1981) societal marketing performs three essential functions:-
1. Knowing and understanding the consumer’s changing needs and wants;
2. Efficiently and effectively managing the supply and demand of products and services;
3. Efficient provision of distribution and payment processing systems.
6. Marketing is a philosophy based on consumer orientation and satisfaction
7. Marketing had dual objectives – profit making and consumer satisfaction
Scope of Marketing
1. Study of Consumer Wants and Needs
Goods are produced to satisfy consumer wants. Therefore study is done to identify consumer
needs and wants. These needs and wants motivates consumer to purchase.
2. Study of Consumer behaviour
Marketers performs study of consumer behaviour. Analysis of buyer behaviour helps
marketer in market segmentation and targeting.
3. Production planning and development
Product planning and development starts with the generation of product idea and ends with
the product development and commercialisation. Product planning includes everything from
branding and packaging to product line expansion and contraction.
4. Pricing Policies
Marketer has to determine pricing policies for their products. Pricing policies differs form
product to product. It depends on the level of competition, product life cycle, marketing goals
and objectives, etc.
Study of distribution channel is important in marketing. For maximum sales and profit goods
are required to be distributed to the maximum consumers at minimum cost.
Promotion includes personal selling, sales promotion, and advertising. Right promotion mix
is crucial in accomplishment of marketing goals.
7. Consumer Satisfaction
The product or service offered must satisfy consumer. Consumer satisfaction is the major
objective of marketing.
8. Marketing Control
Marketing audit is done to control the marketing activities.
Definition of Marketing Mix
According to Philip Kotler – “Marketing Mix is the combination of four elements, called the
4P’s (product, Price, Promotion, and Place), that every company has the option of adding,
subtracting, or modifying in order to create a desired marketing strategy”
According to Principles of Marketing, 14e, Kotler and Armstrong, 2012 – “The
Marketing Mix is the set of tactical marketing tools – Product, Price, Promotion, and Place –
that the firm blends to produce the response it wants in the target market.”
Meaning of Marketing Mix
The Marketing Mix is a marketing tool used by marketing professionals. It is often crucial
when determining product or brand’s offering, and it is also called as 4P’s (Product, Price,
Promotion, and Place) of marketing. However, in case of services of different nature the 4
P’s have been expanded to 7P’s or 8P’s.
In recent times, giving more importance to customer a new concept have been introduced, i.e.
Concept of 4C’s. The Concept of 4C’s is more customer-driven replacement of 4P’s.
According to Lauterborn’s the 4C’s are – Consumer, Cost, Communication, and Convenience.
According to Shimizu’s the 4C’s are -Commodity, Cost, Communication, and Channel.
4P’s – Producer-oriented Model of Marketing Mix
Product – Products are offerings that a marketer offers to the target audience to
satisfy their needs and wants. Product can be tangible good or intangible service.
Tangible products are goods like – cell phone, television, or motor car, whereas
intangible products are services like – financial service in a bank, health treatment by
a doctor, legal advice of a lawyer.
Price – Price is the amount that is charged by marketer of his offerings or the amount
that is paid by consumer for the use or consumption of the product. Price is crucial in
determining the organization’s profit and survival. Adjustments in price affects the
demand and sales of the product. Marketers are required to be aware of the customer
perceived value of the product to set the right price.
Promotion – Promotion represents the different methods of communication that are
used by marketer to inform target audience about the product. promotion includes –
advertising, personal selling, public relation, and sales promotion.
Place – Place or distribution refers to making the product available for customers
at convenient and accessible places.