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TOPIC PG.

NO

Distribution 2
Types of distribution 3-5
Distribution objectives 6-8
Promotion 9
Distribution strategies 10-21
Dual distribution strategy 22
Distribution strategy types 23-29
Distribution strategy risk 29-30
Purpose of distribution strategy 31-32
Functions of distribution strategy 33-35
Advantages of distribution strategy 35-38
What is distribution strategy 40-48
Recommendations 49-50
Development of distribution strategy 50-51
Promotional strategies 52-53
Top promotional strategies 53-59
Types of promotional strategies 60-63
Objectives of promotional strategies 63-67

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Disadvantages of promotional strategies 68-71
Importance of promotional strategies 71-81
Effectiveness of promotional strategies 82-85
Examples of promotional strategies 85-86
Characteristics of promotional strategies 87-92
conclusion 92-103

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Abstract
The efficient distribution strategy formulation becomes vital to the success
and survival of any organization, especially when it is involved in
international trade. Today’s world is particularly challenging due to rapidly
changing market conditions. Therefore, in order to able to compete, satisfy
customers, and meet the needs of other stakeholders profitably, it is crucial
for any company to make profound market environment analyses, react to
changes in the market and adjust strategies accordingly. Otherwise they
will significantly affect the company’s performance.

The theoretical part of the thesis was formed on basis of the studied theory
regarding the position of distribution within international marketing strategy,
distribution management, development of channels of
distribution,promotional strategies as well as various environmental forces
affecting company’s performance. The structure of the empirical part is
based on the developed theoretical framework. Primary and secondary
data was collected and analysed. The valuable results were produced.
Semi-structured interview conducted with the case company revealed the
details of the present distribution organization. The interview with the
company’s distributer gave clear understanding of the distributer’s
operations and its collaboration with the brewery.. Based on market
segmentation and targeting, the ultimate customers were profiled and the
geographic locations where they can be found were identified. The gained
knowledge gave the insight into the current marketing situation, present
distribution organization and its effectiveness. The recommendations for
the distribution strategy and promotional strategies are reasonable
suggestions that can be adopted by the brewery to react to the changes.

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DISTRIBUTION
Definition:
Distribution means to spread the product throughout the
marketplace such that a large number of people can buy it.
Distribution involves doing the following things:
1. A good transport system to take the goods into different
geographical areas. 2. A good tracking system so that the right
goods reach at the right time in the right quantity. 3. A good
packaging, which takes the wear and tear of transport. 4. Tracking
the places where the product can be placed such that there is a
maximum opportunity to buy it. 5. It also involves a system to take
back goods from the trade.

Description:
Distribution can make or break a company. A good distribution
system quite simply means the company has greater chance of
selling its products more than its competitors. The company that
spreads its products wider and faster into the market place at
lower costs than its competitors will make greater margins absorb
raw material price rise better and last longer in tough market
conditions. Distribution is critical for any type of industry or
service. The best price product, promotion and people come to
nothing if the product is not available for sale at the points at
which consumers can buy.

In the FMCG industry in India, specially, companies distribute


their low-value, high volume products to over 1 million retail
outlets, or points of sale. The most successful FMCG companies
have the biggest networks, made of factories, stock points,
distributors or C&F (Carrying and forwarding agents),
wholesalers, retailers and consumers. Nowadays, even direct
marketing is considered a feasible distribution channel
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TYPES OF DISTRIBUTION: INTENSIVE, SELECTIVE
AND EXCLUSIVE DISTRIBUTION

Some of the important types of distribution in international


market are
1. Intensive
2. Selective and
3. Exclusive distribution.
It represents the level of international availability selected for a
particular product by the marketer; the level of intensity chosen
will depend upon factor such as the production capacity, the size
of the target market, pricing and promotion policies and the
amount of product service required by the end-user

There are three broad options:

1) INTENSIVE DISTRIBUTION:
Intensive distribution aims to provide saturation coverage of the
market by using all available outlets. For many products, total
sales are directly linked to the number of outlets used (e.g.,
cigarettes, beer). Intensive distribution is usually required where
customers have a range of acceptable brands to choose from. In
other words, if one brand is not available, a customer will simply
choose another.

This alternative involves all the possible outlets that can be used
to distribute the product. This is particularly useful in products like
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soft drinks where distribution is a key success factor. Here, soft
drink firms distribute their brands through multiple outlets to
ensure their easy availability to the customer.

Hence, on the one hand these brands are available in restaurants


and five star hotels and on the other hand they are also available
through countless soft drink stalls, kiosks, sweetmarts, tea shops,
and so on. Any possible outlet where the customer is expected to
visit is also an outlet for the soft drink.

2) SELECTIVE DISTRIBUTION:
Selective distribution involves a producer using a limited number
of outlets in a geographical area to sell products. An advantage of
this approach is that the producer can choose the most
appropriate or best-performing outlets and focus effort (e.g.,
training) on them. Selective distribution works best when
consumers are prepared to “shop around”

in other words – they have a preference for a particular brand or


price and will search out the outlets that supply.

This alternative is the middle path approach to distribution. Here,


the firm selects some outlets to distribute its products. This
alternative helps focus the selling effort of manufacturing firms on
a few outlets rather than dissipating it over countless marginal
ones.

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It also enables the firm to establish a good working relationship
with channel members. Selective distribution can help the
manufacturer gain optimum market coverage and more control
but at a lesser cost than intensive distribution. Both existing and
new firms are known to use this alternative.

3) EXCLUSIVE DISTRIBUTION:
Exclusive distribution is an extreme form of selective distribution
in which only one wholesaler, retailer or distributor is used in a
specific geographical area.

When the firm distributes its brand through just one or two major
outlets in the market, who exclusively deal in it and not all
competing brands, it is said that the firm is using an exclusive
distribution strategy. This is a common form of distribution in
products and brands that seek a high prestigious image.

Typical examples are of designer ware, major domestic


appliances and even automobiles. By granting exclusive
distribution rights, the manufacturer hopes to have control over
the intermediaries price, promotion, credit inventory and service
policies. The firm also hopes to get the benefit of aggressive
selling by such outlets.

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DISTRIBUTION OBJECTIVES

Objectives: A firm’s distribution objectives will ultimately be highly


related—some will enhance each other while others will compete.
For example, as we have discussed, more exclusive and higher
service distribution will generally entail less intensity and lesser
reach. Cost has to be traded off against speed of delivery and
intensity (it is much more expensive to have a product available in
convenience stores than in supermarkets, for example).

Narrow vs. wide reach: The extent to which a firm should seek
narrow (exclusive) vs. wide (intense) distribution depends on a
number of factors. One issue is the consumer’s likelihood of
switching and willingness to search. For example, most
consumers will switch soft drink brands rather than walking from a
vending machine to a convenience store several blocks away, so
intensity of distribution is essential here. However, for sewing
machines, consumers will expect to travel at least to a department
or discount store, and premium brands may have more credibility
if they are carried only in full service specialty stores.

Retailers involved in a more exclusive distribution arrangement


are likely to be more “loyal”—i.e., they will tend to

 Recommend the product to the customer and thus sell large


quantities;
 Carry larger inventories and selections;
 Provide more services

Thus, for example, Compaq in its early history instituted a policy


that all computers must be purchased through a dealer. On the

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surface, Compaq passed up the opportunity to sell large numbers
of computers directly to large firms without sharing the profits with
dealers. On the other hand, dealers were more likely to
recommend Compaq since they knew that consumers would be
buying these from dealers. When customers came in asking for
IBMs, the dealers were more likely to indicate that if they really
wanted those, they could have them—“But first, let’s show you
how you will get much better value with a Compaq.”

 Distribution opportunities: Distribution provides a


number of opportunities for the marketer that may normally
be associated with other elements of the marketing mix. For
example, for a cost, the firm can promote its objective by
such activities as in-store demonstrations/samples and
special placement (for which the retailer is often paid).
Placement is also an opportunity for promotion—e.g.,
airlines know that they, as “prestige accounts,” can
get VERY good deals from soft drink makers who are eager
to have their products offered on the airlines. Similarly, it
may be useful to give away, or sell at low prices, certain
premiums (e.g., T-shirts or cups with the corporate logo.) It
may even be possible to have advertisements printed on the
retailer’s bags (e.g., “Got milk?”)

Other opportunities involve “parallel” distribution (e.g., having


products sold both through conventional channels and through
the Internet or factory outlet stores). Partnerships and joint
promotions may involve distribution (e.g., Burger King sells clearly
branded Hershey pies).

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Typical intermediaries involved in distribution include:
 Wholesaler: A merchant intermediary who sells chiefly to
retailers, other merchants, or industrial, institutional, and
commercial users mainly for resale or business use.
Wholesalers typically sell in large quantities. (Wholesalers,
by definition, donot deal directly with the public). [9]
 Retailer: A merchant intermediary who sells direct to the
public. There are many different types of retail outlet - from
hypermarts and supermarkets to small, independent stores.
 Agent: An intermediary who is authorised to act for a
principal in order to facilitate exchange. Unlike merchant
wholesalers and retailers, agents do not take title to goods,
but simply put buyers and sellers together. Agents are
typically paid via commissions by the principal. For example,
travel agents are paid a commission of around 15% for each
booking made with an airline or hotel operator.
 Jobber: A jobber is a special type of wholesaler, typically one
who operates on a small scale and sells only to retailers or
institutions. For example, rack jobbers are small independent
wholesalers who operate from a truck, supplying
convenience stores with snack foods and drinks on a regular
basis. [10]

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PROMOTION
In marketing, promotion refers to any type of marketing
communication used to inform or persuade target audiences of
the relative merits of a product, service, brand or issue. The aim
of promotion is to increase awareness, create interest, generate
sales or create brand loyalty. It is one of the basic elements of
the market mix, which includes the four P's: price, product,
promotion, and place.[1]
Promotion is also one of the elements in the promotional mix or
promotional mix or promotional plan. These are personal
selling, advertising, sales promotion, direct
marketing publicity and may also include event
marketing, exhibitions and trade shows.[2] A promotional plan
specifies how much attention to pay to each of the elements in the
promotional mix, and what proportion of the budget should be
allocated to each element.
Promotion covers the methods of communication that a marketer
uses to provide information about its product. Information can be
both verbal and visual.
Etymology and usage
The term, "promotion' derives from the Old
French, promocion meaning to "move forward", "push onward" or
to "advance in rank or position" which in turn, comes from the
Latin, promotionemmeaning "a moving forward". The word
entered the English language in the 14th century. [3]
The use of the term promotion to refer to "advertising or publicity"
is very modern and is first recorded in 1925. [4] It may be a
contraction of a related term, sales promotion, which is one

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element in the larger set of tools used in marketing
communications. The terms, promotion and marketing
communications can be used synonymously, but in practice, the
latter is more widely used. [5]
Purpose
There are three objectives of promotion. These are:[6]

1. To present information to consumers and others.


2. To increase demand.
3. To differentiate a product.
The purpose of a promotion and thus its promotional plan can
have a wide range, including: sales increases, new product
acceptance, creation of brand equity, positioning, competitive
retaliations, or creation of a corporate image.[2]
The term 'promotion' tends to be used internally by the marketing
function. To the public or the market, phrases like "special offer"
are more common. Examples of a fully integrated, long-term, and
large-scale promotion are My Coke Rewards in the USA or

Distribution strategies
Definition: Distribution Strategy
Distribution Strategy is a strategy or a plan to make a product or a
service available to the target customers through its supply chain.
Distribution strategy designs the entire approach for availability of
the offering starting taking inputs from what the company
communicated in marketing campaigns to what target audience is
to be served. A company can decide whether it wants to serve the
product and service through their own channels or partner with
other companies to use their distribution channels to do the same.

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Some companies can use their own exclusive stores for their own
products or can use available retail chains to sell their products. It
can be combination of both. Many companies these days also use
online exclusive channels to sell their products or services.
Distribution Strategy is precisely the strategy deployed by a
company to make sure the product/service can reach the
maximum potential customers at minimal or optimal distribution
costs. A good distribution strategy can maximize your revenue
and profits but a bad and unplanned distribution strategy can lead
not only to losses but also helping the competitors get the
advantage through the opportunity in the market which you
created.
Overall there are 3 major distribution strategies
1. Exclusive Distribution : Exclusive stories to sell products leads
to more control. Example, Luis Vuitton Stores
2. Intensive Distribution : Maximizing outlets to maximize sales.
Example, Coca Cola
3. Selective Distribution : Carefully choosing multiple channels
and partners. Example, Adidas, Nike

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The above 3 distribution strategies are the most used but a typical
strategy may differ for a particular product or a company. Many
companies use online as well as offline strategies together to
optimize sales e.g. Apple iPhone.
In many situations one or more distribution channels can be used,
for example (there are many more forms apart from these)

1. Manufacturer -> end customer


2. Manufacture -> agent -> end customer
3. Manufacturer -> retailer -> end customer
4. Manufacturer -> wholesaler -> retailer -> end customer
5. Manufacturer -> reseller -> retailer -> end customer
6. Manufacturer -> franchisor -> franchisee -> end customer

Distribution strategy should be optimized and updated regularly


as per the market parameters through demand
analysis and supply analysis so that it can keep up with the
current market scenarios and does what it is intended to do i.e.

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make product reach to potential customers. Push or pull
marketing strategies would both not work if a company's
distribution strategy is not in place.
Distribution Strategy depends upon following parameters too:

 Location of business
 Location of target market
 Reaching the target market
 Warehousing
 Transportation and logistics

Hence, this concludes the definition of Distribution Strategy along


with its overview.
Prior to designing a distribution system, the planner needs to
determine what the distribution channel is to achieve in broad
terms. The overall approach to distributing products or services
depends on a number of factors including the type of product,
especially perishability; the market served; the geographic scope
of operations and the firm's overall mission and vision. The
process of setting out a broad statement of the aims and
objectives of a distribution channel is a strategic level decision.

In an intensive distribution approach, the marketer relies on chain


stores to reach broad markets in a cost efficient manner
Strategically, there are three approaches to distribution:[3]

 Mass distribution
 Selective distribution
 Exclusive distribution
 Mass distribution: (also known as Intensive distribution)
When products are destined for a mass market, the marketer
will seek out intermediaries that appeal to a broad market

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base. For example, snack foods and drinks are sold via a
wide variety of outlets including supermarkets, convenience
stores, vending machines, cafeterias and others. The choice
of distribution outlet is skewed towards those than can
deliver mass markets in a cost efficient manner.
 Selective distribution: A manufacturer may choose to restrict
the number of outlets handling a product. For example, a
manufacturer of premiumelectrical goods may choose to
deal with department stores and independent outlets that
can provide added value service level required to support
the product. Dr Scholl orthopedic sandals, for example, only
sell their product through pharmacies because this type of
intermediary supports the desired therapeutic positioning of
the product. Some of the prestige brands of cosmetics and
skincare, such as Estee Lauder, Jurlique and Clinique, insist
that sales staff are trained to use the product range. The
manufacturer will only allow trained clinicians to sell their
products.
 Exclusive distribution: In an exclusive distribution
approach, a manufacturer chooses to deal with one
intermediary or one type of intermediary. The advantage
of an exclusive approach is that the manufacturer retains
greater control over the distribution process. In exclusive
arrangements, the distributor is expected to work closely
with the manufacturer and add value to the product
through service level, after sales care or client support
services. The most common type of exclusive
arrangement an agreement between a supplier and a
retailer granting the retailer exclusive rights within a
specific geographic area to carry the supplier's product.[4]

summary of strategic approaches to distribution

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Approach Definition

The producer's products are stocked in the majority


Intensive of outlets.[5] This strategy is common for mass
distribution produced products such as basic supplies, snack
foods, magazines and soft drink beverages.[6]

The producer relies on a few intermediaries to carry


their product.[5] This strategy is commonly observed
Selective
for more specialised goods that are carried through
distribution
specialist dealers, for example, brands of craft
tools, or large appliances.

The producer selects only very few


intermediaries.[5] Exclusive distribution occurs
Exclusive where the seller agrees to allow a single retailer the
distribution right to sell the manufacturer's products. This
strategy is typical of luxury goods retailers such as
Gucci.

Push vs pull strategy


In consumer markets, another key strategic level decision is
whether to use a push or pull strategy. In a push strategy, the
marketer uses intensive advertising and incentives aimed at
distributors, especially retailers and wholesalers, with the
expectation that they will stock the product or brand, and that
consumers will purchase it when they see it in stores. In contrast,
in a pull strategy, the marketer promotes the product directly to
consumers hoping that they will pressure retailers to stock the
product or brand, thereby pulling it through the distribution

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channel.[7] The choice of a push or pull strategy has important
implications for advertising and promotion. In a push strategy the
promotional mix would consist of trade advertising and sales calls
while the advertising media would normally be weighted towards
trade magazines, exhibitions and trade shows while a pull
strategy would make more extensive use consumer advertising
and sales promotions while the media mix would be weighted
towards mass-market media such as newspapers, magazines,
television and radio.[8]Zone in the UK and Pepsi Stuff .
 Distribution Strategy 2
Overview Definition Distribution Channels Channel Strategy
Channel Management Physical Distribution Physical Distribution
System Ethical Issues
 Distribution Strategy 3
Definition Distribution is one of the four aspects of marketing. A
distributor is the middleman between the manufacturer and
retailer. After a product is manufactured it is typically shipped (and
usually sold) to a distributor. The distributor then sells the product
to retailers or customers

 Distribution Strategy 4
Distribution Channels To reconcile the needs of producers and
consumers To improve efficiency by reducing the number of
transactions and creating bulk To improve accessibility by
lowering location and time gaps between producers and
consumers To improve specialist services to customers

 Distribution Strategy 5

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How a channel intermediary increases distribution efficiciency

 Distribution Strategy 6
Distribution Channels Consumer Channels

 Distribution Strategy 7
Distribution Channels B2B Channels

 Distribution Strategy 8
Distribution Channels Services Channels

 Distribution Strategy 9
Channel Strategy Channel strategy decisions involve selection of
the most effective distribution channel most appropriate level of
distribution intensity and degree of channel integration

 Distribution Strategy 10
Channel Strategy Channel Selection Market factors „ Buyer
behaviour, buyer needs, willingness of channel intermediaries,
location of costumers Producer factors „ Lack of financial
resources, product mix, desired degree of control Product factors
„ Direct distribution Competitive factors „ Innovative approach,
salesforce or producer-owned distribution network, direct
marketing

 Distribution Strategy 11
Channel Strategy Distribution Intensity Intensive Distribution „
Aims to achieve saturation coverage of the market by using all
available outlets Selective Distribution „ A producer uses a limited
number of outlets in a geographical area to sell its products

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Exclusive Distribution „ Only one wholesaler, retailer or industrial
distributer is used in a geographic area.

 Distribution Strategy 12
Channel Strategy Channel Integration Conventional marketing
channels „ Hard bargaining and, occasionally, conflict Franchising
„ A producer and channel intermediaries agree each member‘s
rights and obligations Channel ownership „ Total control over
distributor activities Distribution Strategy 13
Channel Management Channel management is an effective
implementation of the key channel strategy decisions Channel
management Selection Motivation Training Evaluation Managing
conflict

 Distribution Strategy 14
Channel Management Managing conflict Sources of channel
conflict Differences in goals Differences in desired product line
Multiple distribution channels Inadequacies in performance

 Distribution Strategy 15
Channel Management Managing Conflict Avoiding and resolving
conflict Developing a partnership approach Training in conflict
handeling Market partitioning Improving performance Channel
ownership Coercion

 Distribution Strategy 16
Physical Distribution Definition Physical Distribution defined as a
set of activities concered with the physical flows with materials,
components and finished goods from producer to channel
intermediaries and consumers‘
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 Distribution Strategy 17
Physical Distribution System

 Distribution Strategy 18
Physical Distribution System Customer Service What level of
customer service should be provided? Order Processing How
should the orders be handled?

 Distribution Strategy 19
Physical Distribution System Inventory Control How much
inventory should be held? Warehousing Where should the
inventory be located and how many warehouses should be used?

 Distribution Strategy 20
Physical Distribution System Transportation How will the
products be transported? Materials handling How will the products
be handled during transportaion

 Distribution Strategy 21
Ethical Issues Slotting allowances Grey markets Exclusive
dealing Restriction in supply Thank you for your attention! D

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Sources „Principles and Practice of Marketing“ 5th edition, David
Jobber www.wikipedia.org

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Distribution Strategies

For product-focused companies, establishing the most appropriate


distribution strategies is a major key to success, defined as maximizing
sales and profits. Unfortunately, many of these companies often fail to
establish or maintain the most effective distribution strategies. Problems
that we have identified include:

 Unwillingness to establish different distribution channels for different


products
 Fear of utilizing multiple channels, especially including direct or semi-
direct sales, due to concerns about erosion of distributor loyalty or inter-
channel cannibalization
 Failure to periodically re-visit and update distribution strategies
 Lack of creativity and resistance to change

To be fair, there can be sound reasons for these perceived weaknesses.


More typically, however, they are due to failings such as simple inertia, lack
of understanding of the ultimate customers and their preferences, or a

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failure to acknowledge the importance of a distribution strategy and invest
sufficient resources in understanding it.

“Now” is absolutely NOT the time to blindly continue the status quo with
your distribution strategies. The Internet is creating sea-changes in terms of
traditional manufacturer-distributor relations. It has seen significant waves
of disintermediation in multiple product lines, and can facilitate cost-
effective broadening of distribution channels. Meanwhile, improvements in
supply chain management technologies must also be factored into choice
of distribution partners.

InfoTrends can help your company improve its distribution strategies by:

 Mapping your products to the end-user


 Determining customers’ channel preferences and comparing these
preferences with actual availability
 Recommending new channels, and why
 Examining competitors’ strategies and comparing them and their
effectiveness with
your own
 Confidential interviews with your distribution partners to identify areas for
improvement, as well as existing strengths to be encouraged

Contact InfoTrends to discuss how we can we help you better understand


and improve your distribution strategies.
Let’s take a look at each classification A dual distribution strategy can
grow your business

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USING A DUAL DISTRIBUTION
STRATEGY TO GROW YOUR
BUSINESS
Small business owners often find the task of identifying new
marketing opportunities especially challenging. After all, much of
their time is spent running their small business.

This, however, does not mean that new and innovative marketing
opportunities have to be ignored. Actually, as this article will
highlight, the perfect marketing opportunity might be found in your
distribution strategy.

What does DISTRIBUTION mean?

Distribution is the channel structure used to transfer goods or


services from a business to the market. And a MARKET is simply
a defined group of consumers or businesses with a need for our
goods or services (our products).

Distribution strategy TYPES

We need to regard distribution as as the CONVENIENCE aspect


of our product offerings. In fact, the speed at which products can
go from point of manufacture to being in the hands of buyers has
proven to be a genuine differential advantage for many
businesses. Distribution strategies fall under three classifications.
They are:

1. Direct distribution;
2. Indirect distribution; and
3. Dual distribution strategies.

in a tad more detail.


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Direct distribution strategy
A business will be using a direct distribution strategy if it
distributes its products directly to end-users, without using middle
people in the transaction process. Note: End-users can be
businesses or ultimate consumers.

For instance, mattress manufacturer, Makin Mattresses, produces


a wide range of mattresses. Electing to bypasses bedding
retailers altogether, this company has chosen to directly supply
end-users. In other words, we can visit their factory and buy their
bedding products directly.

Interestingly, because retailers (middle people) are excluded from


their supply chain, the mattress manufacturer is able to keep
prices down and improve profit margin. And, they’re able to do so
without compromising quality.

Of course, direct distribution does have drawbacks. The downside


usually relates to lack of CONVENIENCE. For instance, one
generally doesn’t have to travel far to visit retailers, such
as SNOOZE, FORTY WINKS or SUPER AMART. By
comparison, MAKIN MATTRESSES has limited outlets
throughout Australia.

Indirect distribution strategy


A business will be using an indirect distribution strategy when at
least one form of middle person is involved in the distribution
process. These middle people might be commission sales agents,
wholesalers or retailers.

This is the most common distribution strategy used by


manufacturers of consumer goods, such as food and beverages,
clothing, footwear, electrical appliances and motor vehicles.

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Dual distribution strategy
It is now becoming very common for businesses to engage a dual
distribution strategy. This is where a business supplies its goods
or services – both directly and indirectly – to end-users.

In today’s truly global economy, many products reach the maturity


stage in their product lifecycle very quickly. This means that sales
often reach the point at which growth stops and sales begin to
decline. Quite often, this shortened product lifecycle is a
consequence of intense competition.

In response to this, many businesses have been able to


successfully extend their product(s) lifecycle, increase sales
volume, and increase market share, simply by using a DUAL
DISTRIBUTION STRATEGY.

For example, stop for a moment and consider Apple Inc. The tech
giant sells its extensive product range directly to us from its own
retail stores and online store.

In addition, APPLE INC also supplies its products using


an INDIRECT DISTRIBUTION STRATEGY. Using this
channel, APPLE sells its products to selected retailers, such
as TELSTRA
SHOPS, OPTUS, MYER, OFFICEWORKS and HARVEY
NORMAN. These retailers then on-sell their products to us
(ultimate consumers).

As another example, for many years Nike would not sell directly to
the public. Consumers were required to buy the brand’s products
through NIKE’S approved dealer (retailer) network. The sporting
manufacturer now has its own retail stores, as well as its online e-
commerce store, Nikestore.com.au.

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As illustrated below, a dual distribution strategy may look very
straightforward. Or it may be far more complex.

A dual distribution strategy can be risky!


If you’re thinking about using a dual distribution strategy, it’s
important that you understand that there are risks associated with
this approach. For example, until roughly 15-years ago, it was
uncommon for a business that distributed its
products INDIRECTLY – through retailers – to go into direct
competition with these retailers (their customers), with a direct
distribution approach.

A dual distribution strategy can result in animosity (ill-feelings)


between channel members – usually at a vertical level. This is
known as vertical channel conflict. Therefore, an analysis of risks
versus benefits should be conducted.

In addition, it is wise to consider the possibility that a dual


distribution strategy sometimes cannibalises sales from one’s
reseller channels. In other words, the company’s sales volume
may not increase, although its effort and cost to achieve existing
levels of sales volume may drastically spike.

WHAT ARE THE VARIOUS DISTRIBUTION STRATEGIES


FOR A COMPANY?
In today’s fast paced world, distribution by a company can be an
enormous competitive advantageto the company. Most
companies target their customers far and wide. Because of the
rising costs, companies are trying to expand in various markets so
that they have a higher turnover and hence a higher margin.

To reach far and wide, you need the right distribution strategies in
place. You cannot market a product and then not deliver the
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product to the end customer. This is a sheer loss of money as you
waste money on your marketing and the opportunity loss is also
huge. Not to mention, the loss to the brand when the
customer wants to purchase the product but cannot find it.

Thus, there is a lot of importance given to making proper


distribution strategies for a company. This is also the reason
why Place (Which majorly consists of distribution) is one of the
major 4P’s of the marketing mix. Place is considered in case
of products as well as services.

DISTRIBUTION STRATEGIES
Distribution strategy is mainly decided by keeping the top
management in loop because it affects overall operations. This
strategy can be summarised with 3 main points.

 How to get the product from the manufacturing point to the


end customer.

 How to control costs and save time while executing the


distribution strategy

 How to build a competitive advantage through distribution

On a macro level, there are two types of distribution.

1) Indirect distribution
Indirect distribution is when the product reaches the end customer
through numerous channels in between. For example – The
product goes from manufacturer to C&F, then to the distributor,
then to the retailer and finally to the customer. Thus the chain is
long.
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2) Direct distribution
Direct distribution is when the company either directly sends the
product to end customer or when the channel length is very less.
A company selling on an e commerce portal or selling
through modern retail is the form of Direct distribution.

Further more, distribution strategies are also decided based on


the level of penetration that the company wants to achieve.
This level of penetration is decided again by the remaining 3 P’s
of the marketing mix – Product, price and promotions. However,
based on the level of penetration, the distribution strategies vary
as follows.

3) Intensive distribution
When the company is having a mass marketing product, then it
uses intensive distribution. Intensive distribution tries to cover as
much of the market as it can. Typical FMCG and consumer
durable products are best example of intensive distribution
strategy. You can read this detailed article on Intensive
Distribution.

4) Selective distribution
A company like Armani, Zara or any other such branded company
will have selective distribution. These companies are likely to
have only limited outlets. For example – In an urban
city, Armanimight have 2-3 outlets at the maximum
whereas Zara might have 4-5. You can read this detailed article
on Selective Distribution.

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5) Exclusive distribution
If Zara has 4-5 outlets in a city, how many outlets would a
company like Lamborghini have? Probably one in a region of 5-7
cities. That’s exclusive distribution for you. If a company wants to
give a big region to one single distributor then it is known as
exclusive distribution strategy. In some cases, a distributor might
be appointed for a complete country. There would be no one
other then that distributor operating in that company. You can
read this detailed article on Exclusive Distribution

Overall, distribution strategies depend a lot on the various


products which the companies might have. A single company
might have multiple product line and lengths, each with its own
distribution strategy.

Some products, which are premium, might need selective


distribution whereas others which are mass products, may need
intensive distribution. The strategies for both types will be
different. So, in the end, the distribution of a company is dynamic
in nature and it contributes a lot to the competitive advantage of
the company.

WHAT IS DISTRIBUTION STRATEGIES RISK?



With the exception of businesses that own their entire supply
chain, every business operates at some place in a distribution
channel. Many small businesses, such as retailers, function as
the last link in the distribution channel that connects products to
customers. As supply chains continue to go global, with
manufacturers looking to distribute their wares at a profit
wherever they can find buyers, businesses face increasing and
increasingly complex distribution channel risks.
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Distribution Channel
A distribution channel refers to the route products or services take
to reach a customer. At the most basic level, a business can
engage in direct sales to customers. The business makes the
product or supplies the service, offers it directly to customers and
takes responsibility for ensuring delivery. In most cases, however,
the distribution channel involves a complex chain of
manufacturers, distributors and retail outlets, with the price
adjusted up at each step to ensure a profit.
Costs
Uncertain costs present a significant risk in distribution channels,
particularly globe-spanning distribution channels. The constant
fluctuation and overall rising cost of fuel can place a serious strain
on pricing and cut into profit margins. Depending on the nature,
place or origin and destination of a product, tariffs can apply.
Although tariffs represent an acknowledged cost of doing
business with overseas businesses, the size of tariffs change
based on political leanings and economic realities.
Currency Values
Exchange rate changes often create risks in a distribution
channel. The sudden increase or decrease in the value of
currency often leads to a dramatic change in the real costs of
distributing a product. Canadian manufacturers took a serious
financial blow when Canadian currency rose in value relative to
the U.S. currency following the 2007-2008 financial crisis.
Distributors or retailers on the wrong side of a change in currency
value often cut back on orders or insist on discounts to offset the
imbalance, which squeezes the profit margin.
Digital Security
Global distribution channels and supply chains depend more and
more on information technology and real-time information updates
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over networks. For businesses that deal in information and digital-
only products, the Internet itself becomes a distribution channel.
Reliance on the Internet creates a host of digital security issues
that range from protecting customer information to protecting
trade secrets. Businesses face the continual risk that a security
breach potentially exposes confidential information that damages
strategic position and revenue streams. A security failure also
opens you up to potential legal action from the government,
customers or other members of the distribution channel.

WHAT IS THE PURPOSE OF A DISTRIBUTION STRATEGY?

The purpose of a distribution channel is to make the right


quantities of the right product/service available at the right place,
at the right time. What has made distribution strategy unique
relative to the other marketing mix decisions is that it has been
almost entirely dependent on physical location. The old saying
among retailers is that the three keys to success are the 3 Ls--
Location, Location, Location!
Intermediaries provide economies of distribution by increasing the
efficiency of the process. They do this by creating time, place, and
possession utility, or what we have referred to simply as right
product, right place, right time. Intermediaries in the distribution
channel fulfill three basic functions.
Intermediaries support economies of scope by adjusting the
discrepancy of assortments . Producers supply large quantities of
a relatively small assortment of products or services, while
customers require relatively small quantities of a large assortment
of products and services. By performing the functions of sorting
and assorting, intermediaries create possession utility through the

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process of exchange and also create time and place utilities. We
refer to these activities as reassortment/sorting, which comprise:

 Sorting which consists of arranging products or services


according to class, kind, or size.
 Sorting out which would refine sorting by, for example, grading
products or output.
 Accumulation which involves the aggregation of stocks from
different suppliers, such as all (or the major) producers of
household equipment or book publishers.
 Allocation which is really distribution according to a plan--who will
get what the producer(s) produced. This might typically involve an
activity such as breaking bulk .
 Assorting which has to do with putting an appropriate package
together. Thus, a men's outfitter might provide an assortment of
suitable clothing: shirts, ties, trousers, socks, shoes, and
underclothes.

Intermediaries routinize transactions so that the cost of


distribution can be minimized. Because of this routinization,
transactions do not need to be bargained on an individual basis,
which would tend to be inefficient in most markets. Routinization
facilitates exchange by leading to standardization and automation.
Standardization of products and services enables comparison and
assessment, which in turn abets the production of the most highly
valued items. By the standardization of issues, such as lot size,
delivery frequency, payment, and communication, a routine is
created to make the exchange relationship between buyers and
sellers both effective and efficient. In channels where it has been
possible to automate activities, the costs of activities such as
reordering can be minimized--for example, the automatic placing
of an order when inventories reach a certain minimum level. In
essence, automation involves machines or systems performing
tasks previously performed by humans--thereby eliminating errors
and reducing labor costs.
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28. Intermediaries facilitate the searching processes of both
producers and customers by structuring the information essential
to both parties. Sellers are searching for buyers and buyers are
searching for sellers, and at the simplest level, intermediaries
provide a place for these parties to find each other. Searching
occurs because of uncertainty. Producers are not positive about
customers' needs and customers cannot be sure that they will be
able to satisfy their consumption needs. Intermediaries reduce
this uncertainty for both parties.
We will use these functions of reassortment/sorting, routinization,
and searching in our construction of a technology-distribution
function grid, or what we call the Internet Distribution Matrix.

THE MAJOR FUNCTIONS OF A DISTRIBUTION


STRATEGIES
The reasons you choose particular places to sell your
product go beyond the amount of sales you generate. Some
distribution channels that help you sell your product also can hurt
your business more than they help sales for a variety of reasons.
Your distribution channel strategy should include a review of your
marketing mix to determine any potential choice’s overall effect on
your product, service or business.
 Distribution Channels
Distribution channels include methods of selling as well as
locations. Methods include direct sales, wholesalers and retailers.
Direct sales involve you selling directly to the consumer with no
middleman, such as in a store you own, online or with a catalog.
Using a wholesaler involves a distributor to get your product into a
variety of channels you might not reach by yourself. Using
retailers, you sell to stores that mark up your product to make
their profit. Specific distribution channel options include retail

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stores, direct-response advertising, on your website, through
catalogs and using sales agents.
 Sales Volume
One of the functions of a distribution channel is to optimize your
sales volume. Even though you might have several opportunities
to distribute your product, you might have limited capacity to
make your product, so you must look at which will help you
generate the most sales. If you rely on retailers to sell your
product and you add online sales to your distribution strategy,
some of your retailers might drop you if they believe their sales
will drop because customers can purchase more easily online.
Maximum sales doesn’t always mean optimum sales because
some channels have higher associated costs.
 Cost of Sales
Some distribution channels require more costs to use. For
example, direct sales requires order processing and fulfillment,
including staff time, shipping and credit card processing software
and transaction fees. Other options might require promotional
costs, such as signage, coupons, displays and sale calls. This is
why distribution channels that offer the highest sales volumes
don’t always offer the highest profit margins.
 Profits
Once you know your expected sales from a potential distribution
channel, your cost of sales and your price per unit, you can
calculate your profit margin per item and gross profits. This helps
you determine which distribution options are the best for you,
based on your ability to fund sales and produce goods.

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 Brand
If you rely on a strong brand in the marketplace, you must
consider the effect that selling in a particular location or using a
particular method has on your brand. Selling a high-end product
through a supermarket, where you are sold next to bargain
brands, can damage your image. If your image includes superior
personal service, selling online can reduce your reputation in this
area.

ADVANTAGES AND DISADVANTAGES OF


DISTRIBUTION STRATEGIES
When a customer is considering buying a product he tries to
access its value by looking at various factors which surround it.
Factors like its delivery, availability etc which are directly
influenced by channel members. Similarly, a marketer too while
choosing his distribution members must access what value is this
member adding to the product. He must compare the benefits
received to the amount paid for using the services of this
intermediary. These benefits can be the following:

 Cost Saving
The members of distribution channel are specialized in
what they do and perform at much lower costs than

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companies trying to run the entire distribution channel all by
itself.

 Time Saving
Along with costs, time of delivery is also reduced due to
efficiency and experience of the channel members. For
example if a grocery store were to receive direct delivery of
goods from every manufacturer the result would have been a
chaos. Everyday hundreds of trucks would line up outside
the store to deliver products. The store may not have
enough space for storing all their products and this would
add to the chaos. If a grocery wholesaler is included in the
distribution chain then the problem is almost solved. This
wholesaler will have a warehouse where he can store bulk
shipments. The grocery store now receives deliveries from
the wholesaler in amounts required and at a suitable time
and often in a single truck. In this way cost as well as time is
saved.

 Customer Convenience
Including members in the distribution chain provides
customer with a lot of convenience in their shopping. If every
manufacturer owned its own grocery store then customers
would have to visit multiple grocery stores to complete their
shopping list. This would be extremely time-consuming as
well as taxing for the customer. Thus channel distribution
provides accumulating and assorting services, which means
they purchase from many suppliers the various goods that a
customer may demand. Secondly, channel distribution is
time saving as the customers can find all that they need in
one retail store and the retailer

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 Customers can buy in small quantities
Retailers buy in bulk quantities from the manufacturer or
wholesaler. This is more cost effective than buying in small
quantities. However they resell in smaller quantities to their
customers. This phenomenon of breaking bulk quantities
and selling them in smaller quantities is known as bulk
breaking. The customers therefore have the benefit of
buying in smaller quantities and they also get a share of the
profit the retailer makes when he buys in bulk from the
supplier.

 Resellers help in boosting sales


Resellers often use persuasive techniques to persuade
customers into buying a product thereby increasing sales for
that product. They often make use of various promotional
offers and special product displays to entice customers into
buying certain products.

 Customers receive financial support


Resellers offer financial programs to their customers
which makes payment easier for the customer. Customers
can buy on credit, buy using a payment plan etc.

 Resellers provide valuable information


Manufacturers who include resellers for selling their
products rely on them to provide information which will help
in improving the product or in increasing its sale. High-level
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channel members often provide sales data. On all other
occasions the manufacturer can always rely on the reseller
to provide him with customer feedback.
Disadvantages of including intermediaries in the
distribution channel
 Revenue loss
The manufacturer sells his product to the intermediaries
at costs lower than the price at which these middlemen sell
to the final customers. Therefore the manufacturer goes for a
loss in revenue. The intermediaries would never offer their
services to the manufacturer unless they made a profit out of
selling his products. They are either made a direct payment
by the manufacturer, for instance shipping costs or as in the
case of retailers by selling the product at costs higher than
the price at which the product was bought from the
manufacturer (also known as markup). The manufacturer
could have sold at this final price and made a greater profit if
he had been managing the distribution all by himself.

 Loss of Communication Control


Along with loss over the revenue the manufacturer also
loses control over what message is being conveyed to the
final customers. The reseller may engage in personal selling
in order to increase the product sale and communicate about
the product to his customers. He might exaggerate about the
benefits of the product this may lead to miscommunication
problems with end users. The marketer may provide training
to the salespersons of retail outlets but on the whole he has
no control on the final message conveyed.

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 Loss of Product Importance
The importance given to a manufacturers product by the
members of the distribution channel is not under the
manufacturers control. In various cases like transportation
delays the product loses its importance in the channel and
the sales suffer. Similarly a competitors product may enjoy
greater importance as the channel members might be
getting a higher promotional incentive.
What is a distribution strategy?
Before we dig into the details, let’s first answer the obvious
question, what exactly is a distribution strategy?

In simple terms, your distribution strategy lays out the details of


how you plan to get your product in the hands of your customers.

Consider the traditional distribution model below.

41
In the distribution model above, let’s say that you’re the
manufacturer. Your distribution strategy would identify which
paths you intend to take in order to get your products to the end
user.

You may decide to sell to wholesalers, retailers, or both.

Either way, you’ll need a strategy that identifies and outlines how
you plan to move your product so you can generate the best
return on your investment.

Step 1: Evaluate the end-user


Before you can sell to someone, you need to have a good
understanding of what it is they want and how they want to go
about buying it.

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This comes down to conducting a little market research.

I won’t get into that much here, but start by asking yourself
questions such as these:

1. Does the end user need personalized service? If so, who is


the best person to provide that service to them?
2. Is the end user more likely to purchase this product online or
at a physical store?
3. How much will you need to educate the end user on your
product? Who is in the best position to help you educate the
end user?

Once you’ve evaluated the end user, start working your way
backwards in the distribution model.

Keep in mind that, if you plan to have distribution partners, you’ll


need to evaluate their needs as well.

Step 2: Identify potential marketing intermediaries


Once you have a clear understanding of your end user, it’s time to
start crunching the numbers and laying out a game plan.

To help us speed things up, I created a spreadsheet. Feel free to


make a copy and use it yourself.

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The first thing we’ll need to do is to identify
potential MARKETING INTERMEDIARIES.

Generally speaking, there are only two ways for you to sell
product to the end user:

1. Directly – you can sell directly to the end user through a sales
force.
2. Indirectly – or you can sell indirectly to the end user
through MARKETING INTERMEDIARIES.

Marketing intermediaries, in short, help you sell your product to


the end user.

You can typically group potential marketing intermediaries into a


couple different categories:

1. Agents and Brokers – Agents and brokers are marketing


intermediaries that act, essentially, like an outsourced sales
force. The main difference here is that agents and brokers
don’t typically buy the product from you. Instead, they sell it
for you and make a fee or commission.
2. Wholesalers and Distributors – Wholesalers and distributors
are marketing intermediaries who purchase product in bulk

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from the manufacturer and store it until they can sell it to
retailers or contractors at a profit.
3. Retailers – Retailers typically purchase products from
wholesalers/distributors and resell it to contractors and end
users.
4. Value Added Resellers – And lastly, value added resellers
such as contractors typically purchase products, bundle them
within their service, and sell it to the end user.

Take a few minutes to brainstorm potential marketing


intermediaries and enter them into the spreadsheet along with the
additional information needed.

Under the “revenue projections” tab, you should see that the
revenue projections were automatically calculated for you. This
information will be important for measuring your progress.

Step 3: Research potential marketing intermediares


Once you’ve identified several marketing intermediaries that you
think you could possibly partner with, start doing your research to
see what you can find.

If you can, reach out to these potential distribution partners and


offer to buy them a cup of coffee.

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Get to know them and consider what type of business
relationship the partnership could turn into.

The point here is to make sure that you really get to know
them…more than just what’s written on paper.

Use the “research intermediares” tab to keep track of these


potential partners.

Here are a few questions that you may want to consider asking:

1. What are some ways that you think we may be able to


partner?
2. What are some of your weaknesses that we could potentially
address?
3. What are some of your strengths that we may be able to take
advantage of?
4. Who would you sell to and at what markup?

Step 4: Narrow in on the profitable distribution channels


Now that we have a good idea of who would make for a good
distribution partner, we now need to find which types of
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distribution channels are available and then narrow in on the most
profitable distribution channels.

Remember, as with anything, your distribution program is going to


cost you money so the idea is to find distribution channels that
generate the best return on your investment.

Distribution channels are, essentially, paths that you push your


products through. In most cases, it’s common to have multiple
channels of distribution that you manage. Different channels of
distribution may have different sets of marketing intermediaries
who help you move your product.

Distribution can typically be grouped into three primary


categories:

1. Intensive distribution – intensive distribution means there are


a lot of intermediaries. An example of intensive distribution
may be snack foods; one product may be stocked in many
stores and may have many different channels of distribution.
2. Selective distribution – selective distribution means there
are a few intermediaries. An example of selective distribution
might be a particular type of fruit that is only sold within a
certain geographical area.
3. Exclusive distribution – exclusive distribution means only a
few intermediaries and those intermediaries have to carry
only their products. An example of exclusive distribution might
be high end fashion products that are only sold in very
specific stores.

The types of distribution channels you will be able to utilize will


differ slightly depending on where you are in the distribution
model and who you are trying to sell to.

47
For example, if your end user is the typical consumer, the types of
distribution channels available may look something like this..

If you sell to business users, the types of distribution channels


may be slightly different…

And lastly, if you provide a service, the types of distribution


channels would probably resemble something like this…

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By now you should, at least, have an idea of which distribution
channels are likely to have the most potential.

To back up those assumptions with proof, go into the “channel


pricing” tab and enter in the markups of your distribution partners.

Next, enter in how much it cost you to make the product and your
desired profit margin.

Once you have those details figured out, it’s time to negotiate the
numbers with your distribution partners.

Keep in mind that your distribution partners are, essentially,


you’re customers. Of course, in this case, your customer’s goal is
to make money. That means that you need to work with them to

49
come up with a mutually beneficial agreement so you can both
make money.

Step 5: Manage your channels of distribution


As with any investment, you’re going to need to manage your
channels of distribution to make sure that you are maximizing
your return on investment.

Make sure that you track the progress of each distribution channel
against the goals that you laid out in the previous steps.

If a distribution channel starts to under perform, meet with your


distribution partners and figure out where the leak is in your
distribution model.

More importantly, determine how you can get things back on track
and optimize each channel of distribution.

You need to predictably be able to make progress.

Conclusion
As I mentioned earlier, laying out your company’s distribution
strategy won’t be the sexiest thing you’ve ever done as a
business person.

The truth is, however, sometimes putting funds into improving


your distribution strategy is a better investment than simply
throwing more money at promotion.

That means that we’ll need to take a minute to crunch the


numbers.

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Recommendations for the case company’s
distribution strategy
From now and until the end of 2015

• Keep the current distribution strategy unchanged;

• Consider sales promotion activities, which can be aimed at the


distributors and/or the ultimate customers;

• “Sell” or prove the value of its partnership with the distributors; •


Discuss with the distributors the level of service provided by the
retailers to the end-customer;

• Consider and evaluate the possibility of entering new


geographic locations;

• Think over a new product development, namely a beer gift


package, which can be sold in the off-trade.

From 2016 onward

• The decisions and plans made in 2015 may be implemented in


2016 if the market situation is improves;

• If the case company chooses to employ another (extra)


distributor and/or a retailer, it should take into account the ways
the risk of conflicts can be lowered;

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• In order to meet the increasing competition, the case company
should develop positioning strategy and based on it – design its
marketing communications.

Some of these recommendations have direct impact on the


company’s distribution strategy, some – indirect such as
recommendations for sales promotion activities. However, all
these suggestions are believed to be the most suitable and right
for the case company’s export to and operation in Russia in the
coming years. Additionally, it is important to notice that the
recommendations have relative timing accuracy..

HOW TO DEVELOP A DISTRIBUTION STRATEGY


A distribution channel strategy enables you to sell to customers in
geographical areas or market sectors that your direct sales team
cannot reach. You can choose from a number of distribution
channels, including wholesalers, retailers, distributors and the
Internet. Each channel gives you different options for dealing with
customers and prospects. However, to ensure that your
distributors operate effectively on your behalf, your strategy must
incorporate the right level of control and support.
 Reach
If your strategy is to grow your business regionally or nationally,
highlight the geographical areas you want to reach through a
distribution channel and identify a network of distributors or
retailers that provide existing coverage of the territories. If you are
planning to export products, focus on established distributors with
detailed local market knowledge. Consider marketing your
products on the Internet so that you can extend coverage to
customers where there is no suitable physical distribution
network.

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 Cost
Although a distribution strategy gives you a ready-made platform
for expansion, it’s important to compare the cost of dealing
through indirect distribution channels with the cost of setting up
your own network or direct sales operation. Without a distribution
network, you will have to commit resources to order processing,
stockholding, delivery, invoicing and customer service. Compare
that with the lower margins you will make by giving distributors a
discount for providing a similar level of service and providing them
with a program of marketing and training support.
 Contribution
Your strategy should also take account of the potential
contribution of each distribution channel. Concentrate on working
with distributors that give you access to an additional customer
base, with no additional direct sales and marketing costs.
Distributors also provide you with local market knowledge,
enabling you to establish your business in new markets without
incurring heavy market entry costs.
 Support
Support and control are critical factors in your distribution
strategy. Appointing a manager to work with distributors enables
you to monitor their performance and identify their support needs.
Develop marketing support programs to meet the needs of
different channels. Options include funds for advertising or direct
marketing campaigns or templates that enable partners to
develop their own campaigns. If channel sales represent a
significant proportion of your business, develop advertising and
marketing campaigns to drive business to your channel partners.
Operating a training program will improve distributors’ product and
marketing knowledge and enable them to deliver a higher
standard of service to customers.
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 Customer Service
It’s important to identify the types of customers you wish to serve
directly. Typically, these would be your largest customers or
customers that demand levels of technical support beyond your
partners’ capability. Use channel partners to deal with large
numbers of smaller customers cost effectively so that you can
concentrate your resources on your key accounts

PROMOTIONAL STRATEGIES
A marketer’s job is to build a marketing program to achieve a
company’s objective. For this, he has to design and administer
various under Four P’s of marketing, namely, product, price, place
and promotion. Marketing communication is an important P (also
called as promotion) of marketing.9 A promotion strategy is an
activity that is designed to help boost the marketing of a product
or service. It is very important as it not only helps to boost sales
but it also helps a business to draw new customers while at the
same time retaining older ones. It can be done through an
advertising campaign, public relation activities, a free sampling
campaign, a free gift campaign, a trading stamp campaign,
through demonstrations and exhibitions, through prize giving
competitions, through temporary price cuts, and through door-to-
door sales, telemarketing, personal sales letters, and e-mails.
Promotion is a reward making activity that influences people to
buy and consume the products of a marketer. The methods and
means of the small scale industrial units are traditional, simple,
involve less costTo be successful such a promotional measure to
influence customers, must be effective and adequate to bring
desired action from the customers. At present, basically the
promotional activities embrace every action on the part of
marketer to communicate their product, place, price and
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promotion activities to their customers economically and
effectively to bring desired result, namely, increased sales, profit
and customer satisfaction.
Definition: Promotional Strategy
Promotion for any product or service is essential for any
company. It is because only through promotion people would
come to know about the product. Only after knowing about the
product they consider purchasing. All the promotional strategies
can be classified under two categories – Push and Pull.

Push strategy
In push strategy promotional activities are done for the
distributors, wholesalers and retailers to push the product to the
consumers. Trade fairs, wholesaler discounts, bonus and all the
activities which benefit the distributors are all examples of push
strategies. Hence the demand is pushed or created in the
distribution channel. These activities are not visible to consumers
and hence it is mostly unknown to the customers.
So when one goes to a mobile store to buy a new phone and the
shopkeeper urges and shows only Samsung phones, it is push
marketing and the shopkeeper is getting more margin on selling
Samsung phone than any other brand.
Pull Strategy
In pull strategy promotional activities are done for the consumers.
Advertisements, digital campaigns, discounts in stores etc are
some examples of pull strategy. Hence demand is created in the
consumers which in turn go to the retail stores or e-commerce
websites to buy these products. These activities are visible to all
the customers.

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When a customer goes with a specific brand and product in his
mind to the market, it is the pull strategy that has worked for the
company.

Hence, this concludes the definition of Promotional Strategy along


with its overview

COCA-COLA COMPANY’S DISTRIBUTION STRATEGY


AND SUGGESTION

The company’s background


The Coca-Cola company was founded Dr. John S. Pemberton in 1886 in
Atlanta (The Coca-Cola company 2016). Now, the company has become
the largest beverage company in the world (The Coca-Cola company
2016). The company has more than 20 sub-brands and the company
obtains more than 1 billion US dollars in annual sales (The Coca-Cola
company 2016).

Distribution method

The Coca-Cola company has a specific distribution method. Due to the


ingredients of Coca- Cola is a trade secret. Thus, the Coca-Cola
manufacturer delivers the beverage bases and syrups to bottling
operations (Coca-Cola Australia 2016). Then, the retailer sells
distribution the final beverage to the customers (Coca-Cola Australia
2016). Therefore, it is one of the franchising distribution methods. This
type distribution method brings some benefits for the Coca-Cola
company. For example, the Coca-Cola company only need afford the
transportation fee between manufacturer to the bottling operations.
Then, the bottling operations and retailers will afford the transportation
fee to customers. Therefore, the Coca-Cola company will save plenty of
cost for distribution.
The Coca-Cola face the problems in distribution field

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However, the Coca-Cola also facing some challenge in the distribution
field. For example, the Coca-Cola company has incredible distribution
problems, lack of internal communication, high cost in the distribution
process and customer loyal problems (Stewart 2014). Therefore, this
blog will provide some suggestion for Coca-Cola base on the marketing
concept in the distribution field.
How to improve the Coca-Cola company distribution
For the incredible issue, the Coca-Cola company should establish a
sophisticated distribution systems (The Coca-Cola company 2016). The
systems may involve several key functions. For example, the inventory
management, orders for shipment, order status, electronic map,
customers management, account collection. The functions may help the
Coca-Cola company according to the orders location to design the
shortest route to deliver their productions. Moreover, the systems should
have the real-time update functions because it is important for the
company’s manger control and communication.
For the customer loyal problems, the Coca-Cola company should adopt
the intensive distribution strategy (Kumar 2016). It means that the
company had better set their retail store at some dense population places,
such as shopping centre, leisure centre or some convenience stores. The
retail store should be set on the place which is easy to help the
consumers purchase their productions. At the same time, the company
may use the pull strategy to promotion their production (Iacobucci 2014,
p.131). For example, the Coca-Cola company should focus on the
customers. It can accredit the retail store giving some discount for the
customers in a period. The company should provide some free sample to
customers and giving their some loyalty points (Iacobucci 2014, p.131).
Moreover, the company should increase some advertises to consumers.
For example, the company may choose the paint in red billboard in some
supermarkets or retail store (Iacobucci 2014, p.131). This type billboard
may attractive the customers attentions. Then, it will stimulate the
customers purchase activities. Therefore, the pull strategy may improve
the customer’s loyalty and customer’s relationship with the company.
Conclusion

57
In conclusion, the Coca-Cola company relies on the franchising
distribution method to develop their company. The franchising
distribution method helps the company saving some cost for delivery.
However, the Coca-Cola company facing some challenges, such as the
communication and customers loyal problems. According to these
problems, the company should establish a distribution system and
cooperate the pull strategy to address these problems.
WordPress username: albert0506
Student ID: 212059758
Reference list

Coca-Cola Australia 2016, ABOUT THE COCA-COLA SYSTEM, Coco-Cola


Australia, retrieved 10 May 2016,
< http://www.coca-colacompany.com/brands/billion-dollar-brands/ >.

Iacobucci, D (2014) MARKETING MANAGEMENT (MM4), South-Western,


Cengage Learning, Mason.

Stewart J 2014, FOR COKE, CHALLENGE IS STAYING RELEVANT, the New


York Times, retrieved 11 May 2016,
<http://www.nytimes.com/2014/03/01/business/challenges-for-coke-to-stay-on-
top.html?_r=0&gt;.

The Coca-Cola company 2016, OUR BILLION-DOLLAR BRANDS, Coca-Cola,


retrieved 10 May 2016, < http://www.coca-colacompany.com/brands/billion-dollar-
brands/ >.

58
TOP TEN PROMOTIONAL
STRATEGIES

Good promotion strategies develop brand recognition while


creating a relationship with clients. Here are the top ten ways a
small business can do both.
No one is going to buy a product or service they haven't heard of,
nor will they buy it from you if they don't know what your company
offers. This is why a great promotion strategy is vital if you want to
grow your business. Some companies use more than one
method, while others may use different methods for different
marketing purposes. Regardless of your company's product or
service, a strong set of promotional strategies can help position
your company in a favorable light, while opening the doors for
future communication.
 Contests
Contests are a frequently used promotional strategy. Many
contests don't even require a purchase. The idea is to promote
your brand and put your logo and name in front of the public
rather than make money through a hard-sell campaign. People
like to win prizes. Sponsoring contests can bring attention to your
product without company overtness.
 Social Media
Social media websites such as Facebook and Google+ offer
companies a way to promote products and services in a more
relaxed environment. This is direct marketing at its best. Social
networks connect with a world of potential customers that can

59
view your company from a different perspective. Rather than
seeing your company as "trying to sell" something, the social
network can see a company that is in touch with people on a
more personal level. This can help lessen the divide between the
company and the buyer, which in turn presents a more appealing
and familiar image of the company.
 Mail Order Marketing
Customers who come into your business are not to be
overlooked. These customers have already decided to purchase
your product. What can be helpful is getting personal information
from these customers. Offer a free product or service in exchange
for the information. These are customers who are already familiar
with your company and represent the target audience you want to
market your new products to.
 Product Giveaways
Product giveaways and allowing potential customers to sample a
product are methods used often by companies to introduce new
food and household products. Many of these companies sponsor
in-store promotions, giving away product samples to entice the
buying public into trying new products.
 Point-of-Sale Promotion and End-Cap Marketing
Point-of-sale and end-cap marketing are ways of selling product
and promoting items in stores. The idea behind this promotional
strategy is convenience and impulse. The end cap, which sits at
the end of aisles in grocery stores, features products a store
wants to promote or move quickly. This product is positioned so it
is easily accessible to the customer. Point-of-sale is a way to
promote new products or products a store needs to move. These
items are placed near the checkout in the store and are often
purchased by consumers on impulse as they wait to be checked
out.
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 Customer Referral Incentive Program
The customer referral incentive program is a way to encourage
current customers to refer new customers to your store. Free
products, big discounts and cash rewards are some of the
incentives you can use. This is a promotional strategy that
leverages your customer base as a sales force.
 Causes and Charity
Promoting your products while supporting a cause can be an
effective promotional strategy. Giving customers a sense of being
a part of something larger simply by using products they might
use anyway creates a win/win situation. You get the customers
and the socially conscious image; customers get a product they
can use and the sense of helping a cause. One way to do this is
to give a percentage of product profit to the cause your company
has committed to helping.
 Branded Promotional Gifts
Giving away functional branded gifts can be a more effective
promotional move than handing out simple business cards. Put
your business card on a magnet, ink pen or key chain. These are
gifts you can give your customers that they may use, which keeps
your business in plain sight rather than in the trash or in a drawer
with other business cards the customer may not look at.
 Customer Appreciation Events
An in-store customer appreciation event with free refreshments
and door prizes will draw customers into the store. Emphasis on
the appreciation part of the event, with no purchase of anything
necessary, is an effective way to draw not only current customers
but also potential customers through the door. Pizza, hot dogs
and soda are inexpensive food items that can be used to make
the event more attractive. Setting up convenient product displays

61
before the launch of the event will ensure the products you want
to promote are highly visible when the customers arrive.
 After-Sale Customer Surveys
Contacting customers by telephone or through the mail after a
sale is a promotional strategy that puts the importance of
customer satisfaction first while leaving the door open for a
promotional opportunity. Skilled salespeople make survey calls to
customers to gather information that can later be used for
marketing by asking questions relating to the way the customers
feel about the products and services purchased. This serves the
dual purpose of promoting your company as one that cares what
the customer thinks and one that is always striving to provide the
best service and product.

Types of promotional strategies


There have been different ways to promote a product in person or
with different media. Both person and media can be either
physically real or virtual/electronic.
 In a physical environment
Promotions can be held in physical environments at special
events such as concerts, festivals, trade shows, and in the field,
such as in grocery or department stores. Interactions in the field
allow immediate purchases. The purchase of a product can
be incentive with discounts (i.e., coupons), free items, or a
contest. This method is used to increase the sales of a given
product. Interactions between the brand and the customer are
performed by a brand ambassador or promotional model who
62
represents the product in physical environments. Brand
ambassadors or promotional models are hired by a marketing
company, which in turn is booked by the brand to represent the
product or service. Person-to-person interaction, as opposed to
media-to-person involvement, establishes connections that add
another dimension to promotion. Building a community through
promoting goods and services can lead to brand loyalty.
 Traditional media
Examples of traditional media include print media such
as newspapers and magazines, electronic media such as radio
and television, and outdoor media such as banner
or billboardadvertisements. Each of these platforms provide ways
for brands to reach consumers with advertisements.
 'Digital media'
Digital media, which includes Internet, social
networking and social media sites, is a modern way for brands to
interact with consumers as it releases news, information and
advertising from the technological limits of print and broadcast
infrastructures.[7] Digital media is currently the most effective way
for brands to reach their consumers on a daily basis. Over 2.7
billion people are online globally, which is about 40% of the
world's population.[8] 67% of all Internet users globally use social
media.[9]
Mass communication has led to modern marketing strategies to
continue focusing on brand awareness, large distributions and
heavy promotions.[10] The fast-paced environment of digital media
presents new methods for promotion to utilize new tools now
available through technology. With the rise of technological
advances, promotions can be done outside of local contexts and
across geographic borders to reach a greater number of potential
consumers. The goal of a promotion is then to reach the most
people possible in a time efficient and a cost efficient manner.

63
Social media, as a modern marketing tool, offers opportunities to
reach larger audiences in an interactive way. These interactions
allow for conversation rather than simply educating the
customer. Facebook, Snapchat, Instagram, Twitter, Pinterest, Go
ogle Plus, Tumblr, as well as alternate audio and media sites
like SoundCloud and Mixcloud allow users to interact and
promote music online with little to no cost. You can purchase and
buy ad space as well as potential customer interactions stores
as Likes, Followers, and clicks to your page with the use of third
parties. As a participatory media culture, social media platforms or
social networking sites are forms of mass communication that,
through media technologies, allow large amounts of product and
distribution of content to reach the largest audience
possible.[2] However, there are downsides to virtual promotions as
severs, systems, and websites may crash, fail, or become
overloaded with information. You also can stand risk of losing
uploaded information and storage and at a use can also be
effected by a number of outside variables.
Brands can explore different strategies to keep consumers
engaged. One popular tool is branded entertainment, or creating
some sort of social game for the user. The benefits of such a
platform include submersing the user in the brand's content.
Users will be more likely to absorb and not grow tired of
advertisements if they are, for example, embedded in the game
as opposed to a bothersome pop-up ad.[11]
Personalizing advertisements is another strategy that can work
well for brands, as it can increase the likelihood that the brand will
be anthropomorphized by the consumer. Personalization
increases click-through intentions when data has been collected
about the consumer.[12]
Brands must navigate the line between effectively promoting their
content to consumers on social media and becoming too invasive
in consumers' lives. Vivid Internet ads that include devices such

64
as animation might increase a user's initial attention to the ad.
However, this may be seen as a distraction to the user if they are
trying to absorb a different part of the site such as reading
text.[13] Additionally, when brands make the effort of overtly
collecting data about their consumers and then personalizing their
ads to them, the consumer's relationship with the advertisements,
following this data collection, is frequently positive. However,
when data is covertly collected, consumers can quickly feel like
the company betrayed their trust.[12] It is important for brands to
utilize personalization in their ads, without making the consumer
feel vulnerable or that their privacy has been betrayed.

1. Objectives of Promotional Strategies


by Rick Suttle

65
Small companies use promotional strategies to achieve
many objectives. These objectives may be short- or long-term in
nature. Marketing and advertising directors or managers are
usually responsible for implementing company promotional
strategies. They may use distribution tactics to push products at
retail stores, or pull tactics aimed at drawing consumer to their
outlets. Whatever the case, promotions can include advertising,
direct mail, billboards, trade shows and even in-store promotions.

66
 Dispensing Product Information
One promotional strategy objective is dispensing product
information. Small companies often distribute brochures, catalogs,
sales letters, videos and other information to market their
products. They also use in-store videos or instructions to
demonstrate more complicated products such as computer
software, vehicles or educational courses, for example.
Businesses also distribute promotional materials with their
websites so people can view literature or online videos at their
leisure. Consumers need information to assess various products
and make purchase decisions. Advertisers use product
information to educate consumers on various product features
and benefits.
 Increasing Customer Traffic
Some promotions are used to generate more customer traffic. For
example, fast food restaurants often feature certain meals at
reduced prices. These meals may be advertised in commercials
to drive people into the fast food restaurants for lunch or dinner.
Businesses may also reward regular customers with frequency
card or loyalty programs. These promotions are designed to
increase customer visits by rewarding them according to their
expenditures. For example, a barber shop may offer customers a
free haircut on the seventh visit. A company typically earns a
large percentage of its sales from repeat business.
 Building Brand Awareness
Small companies usually implement promotional strategies to
increase brand awareness. Brand awareness is the percentage of
people who recognize a brand from a specific company,
according to marketing expert Dave Dolak. It is a metric that is
relative to other competitive companies. In other words,
companies strive to build brand awareness so their products are

67
chosen over other brands. Brand awareness usually increases
over time through repeat advertising and other key promotions.
 Increasing Sales and Profits
Companies primarily promote their products to drive sales and
profits. They may use product sales, coupons and "bogo" or buy-
one/get one free offers to increase sales short-term. But they will
need to emphasize product quality and customer service in their
messages to increase long-term sales and profits. Businesses
usually have specific attributes or core competencies that set
themselves apart from competitors. To be successful, the images
marketers wish to portray must be commensurate with actual
company operations.
A promotional strategy provides a road map for making potential
customers aware of your products and services. Often,
promotional strategies include more than one objective. Once you
establish your objectives, it becomes easier to determine the
promotional tools required to meet your goals. Include a method
of tracking the success of your promotional strategy to see if it
truly met your objectives.
 Market Expansion
Some companies set an objective of expanding their markets to
support goals for growing the company. Your company might
want to approach a secondary market or expand its reach to more
of your primary audience. Some companies plan to open new
stores or expand their Internet presence as part of a growth
strategy.
 Target Specific Markets
Selling to the people most likely to buy your product or service
makes an objective of targeting specific markets important in a
promotional strategy. Once you create the objective, your plan
needs to identify the traits and demographics of potential
customers. You also need to develop a plan that clearly shows
68
what tools you’ll use to approach your audience and convince
them to buy.
 New Offerings
Introducing new products or services may be key to your
business. To meet this objective, you need to find ways to get
your message in front of prospective buyers. Your strategy may
include educating your audience, such as by using the press to
help people understand the value and benefits of a new item.
Discounts or coupons may also be part of the strategy to
encourage people to try the new offering.
 Differentiating Your Product
If you have competition, one of your objectives may focus on
differentiating your product or service from other companies’
offerings. To reach your objective, you must find ways to
communicate how your product’s price, quality, features or
benefits differ from the competition. If you do not have direct
competitors, you may want to establish a position in the market to
deal with indirect competition, such as explaining how your bakery
products differ from the packaged products found in the nearby
grocery store.
 Improving Sales
Increasing sales is an objective that requires finding ways to build
your customer base. Or the objective might focus on finding ways
to encourage your current customers to buy more products or
services from you. If your business is already selling as much as it
can, you may want to use an objective of stabilizing sales so the
company qualifies for more financing or to cut costs involved with
production or staffing.

69
DISADVANTAGES OF PROMOTIONAL STRATEGIES
Marketing promotions might jeopardize short-term revenues, but
the goal is to improve long-term profits. For example, a
promotional effort might convince people to try your product or
service for the first time. If they like what your business offers,
they’ll keep coming back after the promotion ends. But even tried-
and-true marketing and promotional strategies can backfire, so
monitor each campaign carefully to minimize your risk.
 Failure
An obvious disadvantage to a promotional strategy is its potential
for failure. For example, you could invest time and money
designing and advertising a sale, and sacrifice normal profits
during the promotion, only to achieve moderate results. Worse,
your long-term benefits might not offset the costs of the
promotion. Careful research and expert advice from a marketing
consultant can help maximize your chances for success, but
nothing’s guaranteed.
 Decreased Value
The longer a sales promotion lasts, the more likely you will
decrease the perceived value of your product or service. For
example, if a restaurant offers a steep discount for children’s
meals to attract families, parents might balk at paying more after
they get used to the low prices. Keep promotions short to prevent
long-term damage to your overall pricing strategy.
 Predictability
If your promotions occur in a predictable pattern, potential
customers might wait for a sale rather than buy the product or
service at full price now. For example, if a retail clothing store
offers a sizable discount on most holidays, sales will be low

70
between holidays, and relatively few customers will ever pay full
price.
 Bargain Hunters
New customers might learn to love your product or service and
become long-term clients. Or they might abandon you as soon as
the promotion is over and continue to hunt for bargains.
Converting bargain hunters to permanent customers depends on
developing brand loyalty. For example, if your excellent customer
service or high-quality products impress them, they are more
likely to stay with you after prices return to normal levels.
 Celebrity Endorsements
The benefit of using celebrities to endorse your brand is you can
capitalize on the goodwill they elicit from the public. The
disadvantage is your brand identity is vulnerable to their public
relations problems. Research celebrities carefully to increase the
chances their public images will always be worth your investment.

WHY IS PROMOTIONAL STRATEGIES


IMPORTANT FOR A BUSINESS?

Small and medium-sized businesses really need to understand


the importance of promotional and marketing strategies. Business
promoting is an active process which needs to be very closely
scrutinized for obtaining the best results. You can utilize the
manpower that you have to the fullest and come up with
strategies to promote your business and let it flourish.
Promotional strategies and marketing go hand in hand. Marketing
your brand or product will include different aspects of

71
manufacturing, promoting and selling products to the customers.
Promotion is a key element in putting across the benefits of your
product or service to the customers. Well-designed marketing and
promotional strategies ensure long-term success, bring in more
customers and ensure profitability for businesses.

Role of Promotional strategies


Promotion is the voice of your company which send out your
brand’s message loud and clear to the audience. Various media
platforms can be used to promote your company and brand. They
include television, radio, shopping outlets, billboards, magazines,
and social media.

Various promotional strategies can be used to promote and


market your business depending on the goals, objectives and
priorities of your company.
Without marketing promotions, your brand or service would not be
able to garner the attention of the pre-occupied customers.

Benefits
Promoting your brand will help you in many different ways:

 Increase brand awareness


 Provide appropriate information
 Increase Customer Traffic
 Build sales and profits

Not only these but promotions will also help your company to
introduce products easily in the ever-so-competitive market.

72
1) Increasing brand awareness –
Promotions help in creating brand awareness. With the help of
various media like the television, billboards, radio or local
newspaper news, you can spread across information about your
brand and company, which helps people to find out more about
you and look into your products and make purchases.

2) Segment Identification –
If your promotional and marketing strategy is loosely structured, it
might not be successful in targeting the “right” audiences. Having
a full-proof and well-thought-out promotional strategy and
marketing plan can help you identify different segments of
consumers in the market and offer suitable solutions for your
clients.

3) Increasing customer traffic –


Also, promotion helps in helps in increasing customer traffic. The
more you promote your brand, the more will the customers know
about you and your company and the more will they be interested
in your products. Promotion can be done even by giving out free
samples which works wonders for customers! They try your
product and ultimately, come to you and make purchases.

While promotional strategies are very much important, marketers


and businesses must take into account a few aspects in their
marketing mix plan. It is essential that businesses make use of
the right media tool to target their customers. These days, when
social media is the most effective tool on the online platform,

73
promotional strategies need to extend beyond radio, television
and print.

PROMOTIONAL STRATEGIES IN
MARKETING

"Marketing mix" is a term used to describe the "four Ps" of


marketing, which are price, product, place and promotion. These
promotional strategies are ways companies communicate
information about their products and services with the end goal of
increasing sales (Reference 1). Examples of promotional
strategies in marketing include advertising, public relations,
personal selling and sponsorship (Reference 2).

 Advertising
Advertising is a promotional marketing strategy companies use to
create awareness about their products and services. The goal of
advertising as a promotional strategy is to generate a response
from your target customer (Reference 2). You can use a variety of
different types of advertising: television and radio advertisements;
print advertisements in newspapers, magazines and journals;
direct mail advertisements in which you send marketing materials
directly to a select list of customers; and outdoor advertising such
as posters, banners, signs and bus ads.

 Public Relations
Public Relations is a promotional strategy that seeks to establish
and maintain communication and understanding between your
company and the public (Reference 2). Public relations is a long-
term promotional marketing strategy that helps communicate
positive updates about your company, product or service, and
74
helps you control damage when a problem arises that puts your
business in the public spotlight. Examples of public relations
strategies you can use include press releases, media interviews,
corporate web videos, company blogs and interactions in social
media.

 Personal Selling
Personal selling is another promotional strategy you can use to
market your business. Personal selling involves hiring one or
more sales people to manage personal customer relationships
and sell your products and services. Whether you have a large
sales force or you do all the selling yourself, personal selling is an
important strategy for the majority of businesses. When you
determine your personal selling strategy, track and measure the
business you bring in through your sales efforts to help establish
best practices for effective selling.

 Sponsorship
Sponsorship is a promotional strategy in marketing in which your
company pays to be associated with a certain event, cause or
other organization (Reference 2). For example, large companies
pay to sponsor professional sports teams, television events and
international competitions such as the Olympics. In exchange for
sponsoring these events, companies get brand exposure and
publicity. At the local level, you can sponsor a little league team,
local festival or concert to help spread the word about your
business.

75
5 PROMOTIONAL STRATEGIES TO BOOST YOUR BRAND

1. Get the most out of social media


One of the most obvious advantages to using social media is
that they’re typically free (unless you choose to invest a small
portion of your budget towards promoting your ads) and most
take less than an hour to get set up. These things considered
there’s no excuse to not give them a try and see what works. Set
up a time frame, 3 months for example, for a trial period on a
new network. Every company is different and certain social
media networks are more suited for you depending on your
target audience. Make sure to track the success of each.
Increase your presence on networks that are working and
discontinue use of ones that aren’t.

Social media is easy, but there’s still a right way to use it and a
wrong way. Do your research and don’t fall victim to commonly
made mistakes. For example, do you know how to tweet
something? You may think you do, but just in case read over a
list of “Twitter terms” and make sure you truly know how to use a
hashtag. Review the type of language used on each network and
make sure to share relevant content that your target market is
interested in. As a general rule, 90% of the content you post
should be about sharing knowledge and educating. The other
10% should be about your product. Once you understand the
logistics of these networks you can be sure you are utilizing them
to their fullest potential.

2. Generate conversation with swag!


Start by asking what your target audience would want. Take into
consideration size (does it easily fit in your bag?) and quality (will
your logo wash off after one use?). Make sure it is purposeful
and useful. No one needs extra clutter so get some feedback

76
before you place an order. If 3 out of 5 people surveyed say they
would toss it don’t waste your time and your company’s money.
There’s no question that swag can be a great promotional
strategy, but it’s only going to generate conversation if it avoids
the trash. Remember, these items are custom to your brand so
always leave enough time for the order to be created and
request a proof. It’s better to spend a little extra attention and
catch a mistake on the proof than not realizing it until after a
large order has been received.

Understand the point of ordering this swag and make sure that
the point is met once you start passing it out. Find creative ways
to test and see if the ROI was met. Maybe the goal was to
increase your mailing list. How about requesting a business card
or email address before you give someone your new swag?
Maybe you want to encourage more followers on a social media
network or increase attendees at a promotional event you are
hosting. How about offering the swag as incentive for new likes,
shares or giving them away at your event?

Business cards are a creative way to incorporate swag without


giving people more than they want. A windshield replacement
shop with a business card that doubles as a pocket sized ice
scraper or a graphic design firm that includes a ruler along the
bottom of their card gives someone another reason to hang onto
your contact info (other than keeping in touch). Don’t let those
age-old logo printed stress balls deter you from finding a creative
way to use swag as an effective promotional strategy.

3. Offer incentives with targeted landing pages


So you’ve created an e-book or you are offering a webinar that
might appeal to two different types of people within your target
audience. Why not create two different landing pages that offer
the same content but tailor the language so it’ll best relate to
each group. The goal of your landing page is to create
77
conversation and targeted landing pages always have a higher
click-through rate, which means more leads and better ROI.
Make sure you have a clear idea of who these target audiences
are and what they are looking for. What words are they
searching? Why do they want this information? Once you know
this you can adjust the copy so that your landing page comes up
in a Google search, for example, or once on the landing page the
reader is compelled to download your offer or sign up for your
event.

Don’t forget these key aspects to creating a basic landing page:

 A strong headline
 A clean, attractive design
 Dynamic copy
 Ease of use
 An eye catching, clickable button

4. Appeal locally and create an event


There are lots of excuses to get together with potential leads and
like-minded businesses in your area. Networking, marketing and
knowing the competition are a few obvious ones. You can also
take advantage of this face-to-face meeting to pass out swag,
personalize your brand and explore potential new markets. This
is also a great promotional strategy because it gets your name
out in the local community.

Consider different types of events that might appeal to your


target market. Maybe it’s a seminar that’s purpose is to educate
your audience on a particular topic. Maybe you want to do
something less structured, like a social mixer. Encourage people
to attend by marketing the networking potential and offering an
incentive, like snacks or prizes. Even though you are the host,
don’t miss out on the opportunity to get to know your local
competition and build relationships within the community.

78
Save money by utilizing social media to promote these events.
Many of these networks also have an RSVP function that can
help you gage what to expect as far as attendance. You can also
utilize social media to brainstorm ideas for events and get a feel
for what your target market would be interested in. A Facebook
post asking readers what topics they want to know more about
can generate conversation and give you specific feedback. If you
already have an idea throw it out there. A post reading, “Like this
if you would be interested in attending a marketing mixer” can
give you an idea of whom and how many people would come.

5. Boost your brand with education


You probably have a wealth of knowledge about a particular
subject. Maybe you have been blogging about it every day for
months, sending out newsletters weekly and actively posting on
social media networks. Well now it’s time to compile all this
information into one downloadable book, an e-book. If this
seems like a lot of work let me remind you that you have already
created this content. All you are doing is gathering it and
repurposing it into an e-book, which not only makes your site
appear more credible but it also makes your content more

accessible to your readers. With an e-book, readers can learn all

about creating a logo, for example, in one spot instead of


searching through several blog posts.

Use call-to-actions embedded in targeted emails at the end of


relevant blog posts, or share on social media to increase the
traffic to the landing pages made specifically to download this
offer. If you are targeting the right audience and creating
dynamic content your click through rates will increase as well as
shares, followers, likes and potential leads. Not only can this
increase your ROI but all this activity will make your website
more popular to search engines.

79
THE IMPORTANCE OF PROMOTIONAL
STRATEGIES
by Jeremy Bradley

Owners of small and medium-sized businesses need to be keenly


aware of the importance of promotional and marketing strategies.
Promotional and marketing strategies help your organization
utilize the skills of your employees and stakeholders and can help
you develop creative approaches to sales and customer service.
 The Marketing Plan
Promotional and marketing strategies are often first brainstormed
and written as part of an organization's marketing plan. If your
small business doesn't have a marketing plan, you should
seriously consider developing one. Most marketing plans include
the current or expected strategies you have for your products, the
price points of those products, how you intend to distribute the
products, and your advertising and marketing tools. A marketing
plan is also important for developing a promotional strategy as it
helps your business identify its target markets and to set
measurable goals. It is vital to the success of the organization that
you implement a marketing plan that aims for growth and positive
change in the bottom line.
 Understanding Your Clients
Promotional and marketing strategies can also assist your
business in understanding and connecting with clients and
customers. If your marketing plan is loosely structured, you might
not have much success at targeting products to the "right"
demographics. Having a solid and well-thought-out marketing
plan can help you identify gaps in the marketplace and provide
feasible solutions for your clients. If you operate an ice cream
80
business in a neighborhood where no other ice cream shops
exist, it might be easier to attract clients than in a town where
there are other ice cream options. In this case, understanding that
your clients want sprinkles and waffle cones might help you sell
more ice cream and keep your customers coming back for more.

 Developing Financial Goals


Promotional and marketing strategies are also important for
guiding your business into the development of financial goals.
Financial goals are two-fold: They are related to your sales
targets and also to your expenses budget. Sales targets are
initially set as part of the marketing plan but might change over
time according to changing market conditions, increases in
product price, or increases or decreases in consumer demand.
Monitoring expenses is also part of financial goal development. If
your business tends to spend more than it brings in, you'll have a
serious problem maintaining long-term business viability.
However, if the business is able to closely monitor its outflows,
only spending what it absolutely needs to, you'll be better
equipped to increase the profit margins.
 Strategic Planning
Another important aspect of promotional and marketing strategies
involves strategic planning. Strategic planning is a concept that
encompasses marketing, promotion, sales, and financial goals
and is essentially about developing goals for your business.
Having a strategic plan for your business means having plans in
place to deal with both expected and unexpected situations. If you
know that your mortgage will balloon by 5 percent next year, a
strategic plan will outline how you'll increase sales or decrease
expenses to meet this additional outflow. A strategic plan might
also include solutions to "what-if" scenarios. This means having a
plan B for months when profits are down or expenses are
81
unusually high. Sales and promotional strategies are important
here because they allow you to ramp up marketing and to
increase the bottom line without sacrificing efficiencies or service.

Let us now understand the different promotion


strategies involved in rural marketing.
Personal Selling
It is a process of face to face interaction sbetween the
salesperson and the prospective customer. Through a proper
training and guide, a salesman can be a valuable medium
between the marketer and the prospective customer.
A good salesperson is the one who has thorough knowledge
about the product he is about to sell and tries to strike a common
point of link between the product and the customer needs.
Personal Selling in Rural Region
Most of the marketers think personal selling is not feasible in
rural areas because of various reasons ranging from scattered
population to a large number of villages to be covered.
Though still not a prevalent practice adopted by the national level
marketers, personal selling is widely done by the local
manufacturers of utensils, garments, edible good etc.

For the marketer to adopt personal selling as a tool of promotion


in rural area, following are few of the basic requirements that
need to be present in their salesperson −
 Familiarity with the Rural Area − It is difficult for the
salesperson to be familiar with rural area. As the population
of rural region is scattered, it becomes a lot more important

82
for the salesperson to have sufficient knowledge about rural
area which he is supposed to cover.
 Proficiency in Local Language − Fluency in the local
language is another key skill that must be present in the
salesperson. It acts as a major communication point in
converting prospective customer into an actual one.
 Acquaintance with the Rural Folks − It is a common
tendency among rural people that they only pay attention to
those people whom they can consider as a part of their
social group. Thus, if the salesperson belongs to the
particular rural district, in that case his job not only becomes
easy but also chances of success in achieving his sales
target increase strongly.
 Be Persuasive but not Pushy − A good salesperson is one
who is persuasive but not pushy in nature. Rural people are
always skeptical in nature about the new product and
strongly hesitate to purchase it due to lack of faith.
Here a salesperson needs to remove the doubts of the
prospective customer and make him believe to purchase the
product. But being too pushy in his approach can ruin the
chances of sale of the product.
 Public Relations − Public relations in case of marketing
promotions in case of rural areas are highly important so as
to create the formal relationship with the newly acquired
customers. Also, dissemination of information concerning
the rural folk is possible only through effective public
relations.
Educating rural people about the importance of administering
polio drops to children, vaccination to mother and child,
sanitation, hygiene etc. has become possible only through the
publicity health campaigns.

83
EFFECTIVENESS OF
PROMOTIONAL STRATEGIES
Introduction
Promotional strategies are the means of attracting new and
retaining existing customers. Organizations chalk out various
strategies from time to time to grab greater market share which in
turn leads to profit which is the whole sole aim of the companies.
The study was conducted for Cadbury, UK. Cadbury is world's
largest confectionary company and is head quartered in London.
Cadbury was acquired by Kraft Foods in 2010 and it was the
integration of these two companies which made it the largest
confectionary company in the world. Cadbury employs more than
71000 people around the world and had revenue of 5384 million
GBP in the year 2008.
The present day organizations use a variety of strategies to
attract the customers and thereby retain their market position.
Most of the companies use a blend of promotional mix which can
include advertisements, public relations, sales promotions,
internet marketing etc. For deciding the right promotional strategy,
the correct medium must be chosen so that the target market can
be reached in the best possible way. Therefore the company must
give importance while deciding upon the medium of promotion
because they can have a large impact over firm's future.
Marketing is a crucial activity for a business because it has the
capability to enhance as well as ruin it. A well-designed and well-
structured marketing campaign could explain about the product or
service of the company as well as the customer benefits from it in
the most suitable way. But selecting the most suitable promotional
strategy is a difficult and critical task. Mostly companies use a mix

84
of strategies on the basis of their purpose, price, and several
other factors.

Background Information and research


rationale
Promotional strategies play a crucial role in the sales of a
company in today's highly competitive and dynamic business
environment. Since sales can be considered as the life-blood of
every business and without sales no organization can survive,
hence it is highly essential for an organization to develop a
suitable promotional strategy for it. The main objective behind a
sales promotion is to improve the sales of an organization through
predicting and altering the buying behavior of the target market.
But this is a challenging job since customers now have numerous
alternatives for a product. Promotional strategies are hence very
much significant since it not only improve sales or business but
also helps the firm to attract new customers while retaining the
existing ones. An organization can use a variety of promotional
strategies but before that the management must understand the
real nature of their business and then identify the most suitable
strategy. Hence a firm must not underestimate the role played by
promotional strategies in boosting its business.
The companies decide upon these promotional strategies based
upon their business nature, product or service, business image as
well as the medium selected for reaching the target customer
group (Jeannet and Hennessey, 2005). Timing is one crucial
factor which determines the effectiveness of promotional
strategies. The importance of these strategies changes as the
purchase process advances

85
THE DISADVANTAGES OF PROMOTIONAL
STRATEGIES

Marketing promotions might jeopardize short-term revenues, but
the goal is to improve long-term profits. For example, a
promotional effort might convince people to try your product or
service for the first time. If they like what your business offers,
they’ll keep coming back after the promotion ends. But even tried-
and-true marketing and promotional strategies can backfire, so
monitor each campaign carefully to minimize your risk.
 Failure
An obvious disadvantage to a promotional strategy is its potential
for failure. For example, you could invest time and money
designing and advertising a sale, and sacrifice normal profits
during the promotion, only to achieve moderate results. Worse,
your long-term benefits might not offset the costs of the
promotion. Careful research and expert advice from a marketing
consultant can help maximize your chances for success, but
nothing’s guaranteed.
 Decreased Value
The longer a sales promotion lasts, the more likely you will
decrease the perceived value of your product or service. For
example, if a restaurant offers a steep discount for children’s
meals to attract families, parents might balk at paying more after
they get used to the low prices. Keep promotions short to prevent
long-term damage to your overall pricing strategy.
 Predictability
If your promotions occur in a predictable pattern, potential
customers might wait for a sale rather than buy the product or

86
service at full price now. For example, if a retail clothing store
offers a sizable discount on most holidays, sales will be low
between holidays, and relatively few customers will ever pay full
price.
Bargain Hunters
New customers might learn to love your product or service and
become long-term clients. Or they might abandon you as soon as
the promotion is over and continue to hunt for bargains.
Converting bargain hunters to permanent customers depends on
developing brand loyalty. For example, if your excellent customer
service or high-quality products impress them, they are more
likely to stay with you after prices return to normal levels.
 Celebrity Endorsements
The benefit of using celebrities to endorse your brand is you can
capitalize on the goodwill they elicit from the public. The
disadvantage is your brand identity is vulnerable to their public
relations problems. Research celebrities carefully to increase the
chances their public images will always be worth your investment.

EXAMPLES OF PROMOTIONAL STRATEGIES IN A


PRODUCT
The objectives of product promotion are to increase sales, attract
customers, improve product recognition and enhance brand
identity. Product promotion benefits businesses by generating
consumer demand, and benefits consumers by providing needed
information about product availability and uses. Because of
intense competition, it is critical to plan an effective strategy
before initiating a promotion campaign. It is particularly important
for small businesses to utilize their limited resources effectively.

87
 Activities
Sales promotion activities include advertising campaigns, product
demonstrations, trade shows, free sample campaigns, seminars
on related topics, media campaigns, telemarketing, door-to-door
sales, direct mail campaigns and other activities -- the breadth of
sales promotions activities is limited only by creativity. To mount
an effective product promotion campaign, however, you must be
aware of customer psychology and buying patterns as well as the
nature and extent of your competition.
 Push Strategies
Push promotional strategies are demand-driven. A push strategy
is designed to market the product to resellers, such as
wholesalers and retailers, to convince them to provide shelf space
to the product and to advertise it. The campaign usually involves
offering discounts, free trials, quality guarantees and other
persuasive means. The manufacturer of a new product may offer
the product to resellers on a consignment basis to reduce the risk
to the reseller.
 Pull Strategies
Pull strategies are demand-driven because they target the end
user. Manufacturers and wholesalers use this strategy when
retailers are reluctant to carry their product for some reason -- the
product may be too expensive to sell at retail outlets, for example.
Pull strategies include free samples, public promotional events
such as contests, door-to-door sales, point-of-sale displays,
Internet marketing campaigns and telemarketing campaigns.
Media campaigns designed to associate the product with a public
good (such as environmentalism, for example) can be classified
as indirect pull strategies because they are ultimately targeted at
consumers, but involve no direct request to buy.

88
 Hybrid Strategies
Hybrid promotion strategies and end users. Another type involves
partnering with retailers to help them sell the product, often partly
at the manufacturer's or wholesaler's expense. Network marketing
is a particularly innovative hybrid strategy because it recruits
people who function as both resellers and end users at the same
time.

PROMOTIONAL STRATEGIES –
CHARACTERISTICS OF A
SUCCESSFUL ADVERTISEMENT
Many small businesses don’t achieve the success they want from
advertising due to having very little resources at their fingertips.
The results are simply flat due to a lack of good ideas for
improvements. Whether the ads are put in a local newspaper or
are printed in the famous periodical or posted on a website, the
money invested should gain the desired outcome. There are
some common mistakes small businesses and professional
service providers make when designing and posting an
advertisement, which leads to the failure of the advertisement.
Bigger is better is believed in by many. That’s exactly what some
of the small firms think when they want to advertise their product.
They think bigger, bigger, bigger and select a medium where they
need to invest a lot of money, but do not reach the targeted
market. Like if a company specializes in designing diet plans and
want to help out people who had disappointing results from their
individual diet plans, and the company chooses to advertise a full
page in the local paper instead of running advertisement in a
health magazine. Obviously not many of the dieters will notice the
89
advertisement and the advertisement doesn’t get the desired
attention.

So the point is to come up with the best campaign, which will


increase the probability of the ad getting viewed and the right
customers trying to buy the product or sign up for the service.
Studies and research can be carried out on the market and
targeted audiences can be narrowed down. Once getting the list
of newspapers, newsletters and magazines meant for the
customers in mind, find out how many readers they have and the
cost they ask for posting the ad. Special deals are offered by
them from time to time and can only be found by careful and
thorough research.
It is estimated that everyday people are subjected to around three
thousand commercials. That is a massive number and if someone
desires to be noticed, he should certainly be different. Not only
should the services and products sold be unique in the market, so
should be the advertisement. For example, if a business selling
mattresses says, “We Sell Mattresses”, it will not make a
statement and will be passed off as any other mattress
advertisement. But if they say, “Our mattresses are of the finest
quality”, it will make the advertisement stand out in the crowd.
Other catch lines are “Are you suffering from back pain? You
must try our mattresses “, are more specific and will catch the
fancy of the people who are suffering from back pains since a
long time. The advertisement should also focus on the
uniqueness of the product and how it is better compared to the
competitors’ product.

Focusing on the problems of the customers and giving a solution


for them, is what a customer demands. A customer does not buy
a product; he buys benefits in the form of a product. The real
value of the product should be realized and a clear picture of it
should be presented to the customer so he will be able to relate

90
with the product. If the advertisement doesn’t specify the solution
it can provide, the customers will never know of it. So focusing on
the customers problem is what some ads miss.

The last thing missing in most advertisement’s is motivation for


the customers. If the advertiser has designed the advertisement
and the customer had read the advertisement, all efforts and
money invested will be wasted if he doesn’t get up and do
something about it. It shouldn’t be assumed that the customer
knows what to do; instead the advertisement should influence the
mind of the customer and should tell him what to do. Call of action
is the final job of the advertisement. It should call for information,
or visiting the store or even visiting the online store. The message
should sound confident and clear.

3 Product Promotional
Strategies That Guarantees
Success
Product promotional strategies inform, persuade and influence the
consumer’s decisions. It mainly seeks to develop primary and
selective demand. While primary demand mainly focus on the
desire for general products, selective demand puts more focus on
the desire for selective or particular products. The objectives of
these strategies vary among organizations. Some use this
approach to hold their current position in the market, others to
expand their market and still others to present a corporate
viewpoint on a public concern or issue. Businesses can also use
these strategies to reach selected markets.

91
An effective promotional strategy has so many advantages. It can
help a business provide the right business information,
differentiate its products, increase sales, accentuate the value of
their product and stabilize sales. Through the provision of specific
product information, consumers become aware of the availability
of a product in the market. Through product differentiation, a
business is able to differentiate its good and service from those of
the competitors.
The main objective of a promotional strategy is to increase sales
value. Generally, there are strategies that mainly focus on primary
demand while others focus on selective demands. Some
businesses even target specific audiences in order to increase
their sales volume. In addition to increasing sales value,
businesses are also implementing promotional strategies to help
them stabilize sales. Some businesses offer prize contests like
vacation trips, scholarship and color televisions the sales
personnel who meet certain goals.
During off-periods, a business can use sales promotional
materials like pens, calendars and books to stimulate sales. For
instance, hotels are usually crowded on weekdays with business
travelers, but people tend to go home early on Friday to start an
early weekend. As such, many hotels will use promotional
strategies that can attract tourists and visitors to the hotel.
A business with a stable sales pattern is able to improve its
marketing, financial and purchasing plan. This means that the
business is able to even out their production cycle and reduce
production and product management costs. Generally, if your
business has an effective product promotional strategy, you will

92
be able to increase leads, increase sales and close deals,
increase its referrals and trust and lastly, increase the visibility of
the business as a whole. Building trust should be among the top
reasons for identifying an effective promotional strategy. Building
trust will not only help you increase the number of customers to
your business but also help you be a leader in the market.

 Start Using Social Media

The use of social media as a promotional strategy is direct


marketing at its best. Social networking platforms like Facebook,
Twitter and Google+ have over millions of users visiting on a daily
basis, and this make it easy for a business to get in touch with
people out there, even to a personal level. Social media is a more
relaxed environment for promoting your product. Instead of your
company ‘trying to sell’ its products to the consumers out there,
social media allows you to get in touch with consumers in a more
relaxed way. There is a wide pool of potential customers out there
and social media allows you to connect with them easily, all of
whom can view your company or business in a different
perspective.
An ideal factor to keep in mind is business presentation on social
media. Of course, you want to make sure that you present your
business exactly according to your brand. Create content that will
inform your readers; those you interact with, about the product
your business sells.
 Using Mail Order Marketing

93
The first thing you need to note is that your business is still alive
because of the regular consumers who come to your business.
Once customers are fully engaged to your products, they will
always want to buy from you. However, most businesses tend to
make the mistake of avoiding customers in a way; they do not
involve customers in sharing information about what they feel
concerning a product in question.
Remember one thing; every customer who comes to your
business should not be overlooked. They already made the
decision that they are going to buy your products. The best thing
to do is get as much information from your customers as you can.
You can offer them a product or service in exchange of the
information you get from them. The information obtained will help
you market your products to a new market that completely know
nothing about your products.
 Product Giveaway is a Perfect Technique

Product giveaway is a great promotional strategy that guarantees


success for an enterprise. Here, you can give customer products
as samples. If you are dealing in products like food and other
household goods, giveaway could be a great technique to get
people engaged to your products. It is important to note that this
is a great technique to entice your target audience to purchase
from you.
 Bonus Strategy: Renting Product

Did you know that renting your product is among the most
effective product promotional strategies that work? Many
94
businesses are always reluctant about this though. The truth is
that you could potentially rent your product to consumers out
there. Renting product is a great promotional strategy because
you can get your products back and still rent them again to
another consumer. In fact, you stand the chance to make long-
term profit by just renting your products or service to people out
there.
It is important to keep in mind that most people today have less
money. As such, they consider renting to be a better alternative to
buying. In fact, most people would prefer renting products from
time to time than buying the same product because it is either
expensive or they may not need the product until after a long
time.
Conclusion

Product promotional strategies can attract new customers to your


business and makes it easier for your business to get bigger sales
by combining items into special package offers.

EFFECTIVENESS OF PROMOTIONAL
STRATEGIES

Introduction
Promotional strategies are the means of attracting new and
retaining existing customers. Organizations chalk out various
strategies from time to time to grab greater market share which in
turn leads to profit which is the whole sole aim of the companies.

95
The study was conducted for Cadbury, UK. Cadbury is world's
largest confectionary company and is head quartered in London.
Cadbury was acquired by Kraft Foods in 2010 and it was the
integration of these two companies which made it the largest
confectionary company in the world. Cadbury employs more than
71000 people around the world and had revenue of 5384 million
GBP in the year 2008.
The present day organizations use a variety of strategies to
attract the customers and thereby retain their market position.
Most of the companies use a blend of promotional mix which can
include advertisements, public relations, sales promotions,
internet marketing etc. For deciding the right promotional strategy,
the correct medium must be chosen so that the target market can
be reached in the best possible way. Therefore the company must
give importance while deciding upon the medium of promotion
because they can have a large impact over firm's future.
Marketing is a crucial activity for a business because it has the
capability to enhance as well as ruin it. A well-designed and well-
structured marketing campaign could explain about the product or
service of the company as well as the customer benefits from it in
the most suitable way. But selecting the most suitable promotional
strategy is a difficult and critical task. Mostly companies use a mix
of strategies on the basis of their purpose, price, and several
other factors.

Background Information and research rationale


Promotional strategies play a crucial role in the sales of a
company in today's highly competitive and dynamic business
environment. Since sales can be considered as the life-blood of
every business and without sales no organization can survive,
hence it is highly essential for an organization to develop a
suitable promotional strategy for it. The main objective behind a
sales promotion is to improve the sales of an organization through

96
predicting and altering the buying behavior of the target market.
But this is a challenging job since customers now have numerous
alternatives for a product. Promotional strategies are hence very
much significant since it not only improve sales or business but
also helps the firm to attract new customers while retaining the
existing ones. An organization can use a variety of promotional
strategies but before that the management must understand the
real nature of their business and then identify the most suitable
strategy. Hence a firm must not underestimate the role played by
promotional strategies in boosting its business.

Organization Description
Cadbury is world's largest confectionary company and extends it
presence to all the continents in the world. The most popular
brands of the company are Schweppes, Halls, Trident, and Dairy
Milk etc. It is the second largest gum company and third largest
beverages company in the world at present. The parent company
of Cadbury PLC is Kraft Foods. Cadbury now owns more than
70% of confectionary market in countries like India. The company
had a net income of 364 million British pounds in 2008. Cadbury
has eight factories and more than 3000 employees in United
Kingdom. Apart from chocolate, Cadbury also is the owner of
Maynard and Halls is having tie-ups with several confectionary
manufacturers.

Review of literature
Sales promotion can be considered as any strategy or activity
intended to increase the business or trade and thereby boost the
sales (Shimp. 2003). Promotion is a form of communication with
the target customers. Rather it can be considered as a form of
persuasive communication aimed at changing the buying
behavior of the customers. A right promotional strategy will be
helpful to the firm in making the customers understand the fact
97
that it has the right product or service for them. Thus the
promotional strategies have mainly three objectives:
Making the customer aware about the product or service
Persuading the customer to purchase the product
Remind the customer about the product and make them think in
favor of it.
Researches done on this field suggest that billions of dollars are
wasted per year for ineffective promotional techniques (Ambler &
Vakratsas, 1996). Hence it is crucial for every company to
formulate the most effective promotional strategy for it. As a first
step towards selecting the promotional strategy, the company
must decide upon the communication objectives (Zeithaml and
Bitner, 2000). The objectives that need to be communicated
comprise of awareness, knowledge, liking, preference, conviction
and purchase. Promotion can be defined as "activities people use
to communicate with others about their product or service and to
convince them to use it." Whatever that is communicated to the
public must be regarding the business. The communication can
be done in a variety of ways including brochures, newspaper ads,
television ads etc. As per the description provided by Totten and
Block (1994), "Sales promotion refers to many kinds of selling
incentives and techniques intended to produce immediate or
short-term sales effect". There are mainly two types of
promotional strategies: Push strategy and Pull strategy. In a push
strategy, the company takes the product directly to the customer
in order to increase their awareness of the product. This can
involve aggressive personal selling or trade advertising (Lamb
et.al 2008). Other major push strategies are:
Making negotiations with the sellers over keeping the product
Having an efficient supply chain so that sellers get their goods
whenever they need

98
Making the cover or packaging more attractive in order to induce
purchase
Point of sale displays
If a company is following a pull strategy, it will come out with
techniques that would motivate or induce the customers to buy
the product. Consumer advertising, cents-off campaign and gift
coupons etc are some of the common techniques used in this
strategy. Word of mouth marketing is another effective pull
strategy. Customer relationship management (CRM) is another
technique that most companies now adopt in order to attract as
well as retain their customer base. Coupons are used usually in
the trial period of a product since customers easily get attracted
towards it and hence help in initial purchase (Robinson and
Carmack, 1997; Cook, 2003). But many other theorists like Gilbert
and Jackaria (2002) have come up with contrasting statements
saying that coupons have the least impact over product trial.
Many studies also views coupons as an effective sales tool (Peter
and Olson, 1996; Gardener and Trivedi, 1998; Darks, 2000; Fill,
2002). Another factor which has an effect over product trial is
price promotion (Brandweek, 1994). As per the research
conducted by Chandon et.al (2000), customers who belong to
high-promotion prone category are more likely to be influenced by
sales promotion. They are attracted by sales promotions for
reasons further than price savings.
The companies decide upon these promotional strategies based
upon their business nature, product or service, business image as
well as the medium selected for reaching the target customer
group (Jeannet and Hennessey, 2005). Timing is one crucial
factor which determines the effectiveness of promotional
strategies. The importance of these strategies changes as the
purchase process advances (Kurtz et.al 2009)

99
Aims and Objectives of the research
Aim
To evaluate the effectiveness of promotional strategies adopted
by Cadbury UK

Objectives
To identify the key promotional strategies adopted by Cadbury in
UK
To evaluate the most effective strategy for promotion of Cadbury
from the customer point of view
To suggest strategies that could generate business in the future

Research Questions
By means of conducting the research, the following questions are
addressed:
What is the role of promotional strategies in a business?
What are the major strategies for promotion followed by Cadbury
in UK?
Which strategy is the most effective for the company from the
customer's perspective?
What are the strategies for future growth and expansion?

Research Methodology
According to Walliman (2005) research methodology can be
defined as "The scientific and systematic search for pertinent
information on a specific topic". The complete process of
conceptualizing a research is called as research design. It is here
that the data is collected and analyzed. For the current research,
100
both qualitative and quantitative research is conducted. The
research approach that is followed is diagnostic approach. Such
an approach involves identification of problem related to the title
of the research. The data required for the research is collected by
means of structured questionnaires and this data is then analyzed
using certain techniques.

Data collection methods


The research requires both secondary and primary data.
Therefore a technique for collecting the necessary data must be
chosen. These methods could help in meeting the objectives of
the research. The present research requires both qualitative and
quantitative methods for solving the research problem. Mostly, the
secondary data collected is not enough to meet the research
objectives and hence primary data needs to be collected. The
results obtained from primary data tend to be much more
accurate when compared to secondary results.

Primary data collection


As mentioned earlier primary data is collected in situations when
the already available secondary data is insufficient to meet the
research objectives and the problems (Davis, 2000). For
collecting the primary data, the researcher will have to directly
communicate with the samples. The data collected this way be in
crude form and the researcher will convert it into a form that can
be easily understood and can be used in decision making. There
are many techniques for collecting primary data and the most
prominent among them are questionnaires, interviews and
surveys. The technique is chosen based on the nature of the
research as well as research objectives. Some researches make
use of more than one technique also.

101
The current research makes use of questionnaires and interviews
mainly for collecting the feedback from the samples. Analyzing
the literature collected is also done for this purpose. The present
method is useful in obtaining information about promotional
strategies adopted by Cadbury in UK. This way the researcher
can formulate strategies that could help in enhancing the
business of the company. A structured questionnaire is developed
for this. The research makes use of deductive approach by
adding certain questions that are capable of obtaining relevant
details with regard to promotional strategies adopted by Cadbury
in UK. The important facts are included in the questions in order
to obtain maximum information from the samples.

Secondary Data Collection


This forms the most effective method in a lot of researches.
Secondary data can be quite useful in fulfilling the research
objectives thereby helping in answering the research questions.
There exist numerous sources for collecting secondary
information. Most of these sources will be prepared for purposes
other than the present study. They might be used in earlier
researches also. Therefore the data collected this way cannot be
considered as genuine and precise at every point of time. Hence
it is essential to carry out a critical review and analysis so as to
solve the research questions. In many situations it is seen that
secondary data is not sufficient for meeting the research
objectives and sometimes deviate from the real concept behind
the study. This forces the researcher to look out for more relevant
primary research that provides precise solution (Ali, 2000). In
most cases, the secondary research is done by looking in
journals, books, databases, etc. The details about Cadbury can
be obtained from company website as well as some other
financial website. The data that is collected by these means are
critically reviewed in order to meet the objectives.

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Sampling methods
The present research is being conducted among the customers of
Cadbury in UK. The samples for the study are selected from the
customers who visited 3 shopping markets in UK. Convenient
sampling is most suitable for this kind of study. In convenient
sampling, the samples are chosen based upon the convenience
of the researcher. In the current research, the customers are
given with the questionnaires on first come basis. Interviews were
conducted with some samples who were unwilling to fill up the
questionnaire.

Sample size
The sample size is the total number of people who are chosen
from within the population for conducting the study. The sample
size of the current research is 100 which means 100 customers of
Cadbury are given with the questionnaires for filling.

Sampling technique
This is the way by which a researcher selects the samples for his
study. The samples include both recent as well as old customers
of Cadbury. The recent customers could be helpful in identifying
the new trends in promotion adopted by Cadbury while old
customers could compare the traditional promotional strategies
with the latest ones.

Data Analysis
The data collected is required to undergo analysis so as to get
accuracy in the findings. Hence the raw data obtained from the
respondents are analyzed using statistical techniques and
interpreted to reach at judgments. Data analysis techniques are
numerous and they are used as per the requirements of the
researcher (Williams & Wragg, 2004). Data analysis is a crucial
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part of the research as it helps in transforming the crude data
collected from respondents to an easily understandable form
which can be used in decision making. The data in this research
is analyzed using percentage method and it would help in
generating proper results. The researcher must have a clear idea
about the research and the facts used in it so as to make proper
inferences.

Resource Requirements
The present research makes use of both primary and secondary
resources for obtaining required data. Primary information was
collected through questionnaires which were distributed to
customers of Cadbury who visited three super markets in UK. A
few interviews also needed to be conducted with the customers
for obtaining their responses. Secondary resources include
printed materials, articles, books, online databases etc. They
were collected from the World Wide Web and university library.
There are a number of websites which are capable of providing
the relevant details for the researcher for conducting the study.
Data collection is the most important task that must be
accomplished by the researcher. It is on the basis of this data,
that the research is framed and is conducted. This way the
resources play a crucial role in data collection and also determine
the end result of the research.

What is a distribution strategy?


Distribution strategy in digital marketing/content marketing
includes:

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 A decision on what networks to use to distribute your content
 Publication schedules
 Frequency of post across numerous networks
 If funds are available to do paid promotions.

The distribution strategy also would determine if we use a true


Create Once, Publish Everywhere model-where content is re-
distributed sometimes without a link-or are using more of the
model where everything has to link back to something from social
media. I’m typically more of a fan of the model for you don’t
always link but you link when it makes sense.
So the distribution strategy involves organic and also paid options
for distribution. And depending on where we are in the current
digital landscape sometimes we don’t need paid promotions and
sometimes we do. For example, when Facebook first came
around brands could do a lot without ever spending a dime on ads
and early on they didn’t even have ads. Today in late 2017 it’s
nearly impossible to reach people on Facebook without spending
money with Facebook.

What’s a promotions strategy?


Now that we discussed what a distribution strategy is let’s talk
about a promotions strategy.
Promotions strategy at the simplest level includes all paid aspects
of a distribution strategy. Sometimes a promotion strategy can
stand on its own. But often it should be part of an overall organic
and paid distribution strategy.
So if I were to say that my promotion strategy includes sharing my
blog post organically on Twitter, that’s technically incorrect under
these definitions. The organic piece is just that – organic
distribution, which is part of your distribution strategy.

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Now, if I were to put money behind the post and promote it that
would now be part of my promotions strategy.

Conclusion
Clear as mud, right? Now it is important that teams use language
and terminology that everybody agrees on. So that’s why I’m
offering these definitions to you and I’ve used these definitions
over many many projects with several teams.Of course, knowing
the definitions and agreeing on terminology within the team is
important. What’s much more important is to actually distribute
and then promote our content as relevant and to help us reach
ourgoals

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