4 Promotions

opportunity
analysis

1-1
 Promotions opportunity

4 analysis

Chapter overview
1. Promotions opportunity
analysis process
2. Promotional efforts
3. Consumer market segments
4. B-to-B segmentation programs

1-2
 Background
• Successful marketing efforts occur because someone
first identified an opportunity to make a quality contact
with a targeted consumer

• IMC plans are designed to develop and implement those

contacts…and to present the targeted consumer with a
well-defined message spoken in a clear, consistent voice

• The purpose of a promotions opportunity analysis is to

identify consumers and competitors in the marketplace –
and to discover new or unique promotional opportunities
 Specifies the audiences and markets the firm intends to serve
 Provides guidance and structure to IMC plan
1-3
 Promotions opportunity analysis (POA)

• Process marketers use to identify target audiences and the

communication strategies needed to reach those audiences
 Identifies the approach or appeal best suited to each targeted
customer segment

• Two key objectives of a POA:

 Determine which promotional opportunities exist for the firm
 Identify the characteristics of each target audience so that
precise advertising and marketing communications messages
can reach the targeted audiences

1-4
Five-step process for conducting a POA

1) Perform communication market analysis

2) Establish communication objectives

3) Create communications budget

4) Prepare promotional strategies

5) Match tactics with strategies

1-5
 Step 1: Communication market analysis

• A “SWOT” analysis of the organization from a

marketing communications perspective

• Examines five key areas:

 Competitors
 Opportunities
 Target markets
 Customers
 Product positioning
These 5 areas are
studied together –
rather than sequentially

• An effective communication market analysis lays the

foundation for the development of MARCOM goals
 Developing communications objectives is next step in
promotions opportunity analysis (POA) process

1-6
 Competitors
• Goal is to identify competitors and what they are doing
in the promotional, marketing communications area
 Strategically
 Tactically

• Sources of information and insight:

 Advertisements and other promotional/MARCOM materials
 Annual reports
 Web sites
 Trade journals and/or publications
 News articles
 Primary research data
 Retail store visits (if applicable)
 Custom market research (customer interviews, surveys)
 Etc.
1-7
 Opportunities
• Are there consumers that the competition is ignoring?

• Which markets are heavily saturated?

• Are the benefits of our products being clearly and

compellingly communicated?

• Are there opportunities to extend our customer reach

and build customer relationships using a slightly
different approach?

• Are there opportunities that are not being pursued?

1-8
 Target markets
• What benefits does each target market want?

• How can each target market be reached?

• What appeal works best for each target market?

• What needs and wants of the target market are not

being met by a competitor?

• What is the demographic and psychographic

makeup of each target market?

1-9
 Customers
• There are 3 types of customers to analyze:
 Current company customers
 Competitors’ customers
 Potential new customers

• Key point is to understand how people in each of the

above groups:
Think
 What they buy
 Why they buy
 When they buy
 Where they buy
 How they evaluate a product after a purchase

1-10
 Product positioning
• “Positioning” is all about the perception created in the
consumer’s mind regarding the nature of a company
and its brands/products relative to the competition

• Examine the position the firm and its brand(s) have

relative to its competitors
 And against the positioning strategies being pursued
 Is the position perceived and/or being promoted consistent
with the company’s objectives and IMC program?

• (Review the 7 possible positioning strategies on page

100, figure 4.2, in textbook)

1-11
Step 2: Establishing communication goals
Common communication objectives pursued:
• Develop or increase brand awareness
• Increase product category demand
• Change customer beliefs or attitudes
Objectives may
• Enhance purchase actions and behavior differ depending
• Encourage repeat purchases on the stage in
the consumer’s
• Build customer traffic
buying process
• Enhance firm and/or brand image that is being
• Increase market share addressed…
• Increase sales
• Reinforce purchase decisions

Remember: Communication objectives are derived from – and

should reflect – the firm’s overall marketing objectives!
1-12
 Factors impacting relationship
between MARCOM and sales
• The goal(s) of the promotion
 Communication goals will differ by buying process stage
• Threshold effects
 For new products, initial ads yield little behavioral response
 Behavioral response occurs with ad repetition over time
• Carryover effects
 For products purchased only when needed, consumers need to
be exposed to company’s message for so long that when time
comes to buy, the consumer remembers the firm/brand/product
• Wear-out effects
 At certain point, an ad/promotion simply becomes old or boring
• Decay effects
 When firm stops advertising, consumers begin to forget…
• Random events

1-13
Carryover effects are
important in
advertising products
such as boats.

1-14
 Product positioning
• “Positioning” is all about the perception created in the
consumer’s mind regarding the nature of a company
and its brands and products relative to the competition

• Examine the position the firm and its brand(s) have

relative to its competitors
 And against the positioning strategies being pursued
 Is the position perceived and/or being promoted consistent
with the company’s objectives and IMC program?

• (Review the 7 possible positioning strategies on page

100, figure 4.2, in textbook)

1-15
Step 3: Creating a communications budget

Methods of determining the MARCOM budget:

• %-of-sales
 Simple, clear approach – but may change in the opposite direction
of what may be needed (e.g., when sales declines, budget declines)
 Does not allocate $$$ for special needs or to combat competitors
• Match-the-competition
 Somewhat defensive posture: May lead to inefficient use of $$$
• “What we can afford”
 Approach signals mgmt. does not recognize marketing benefits
• Objective and task
 Best method because it links costs to specific objectives
 However, is time-consuming and labor intensive
• Payout planning
 Establishes a ratio of advertising to sales or market share
• Quantitative models
1-16
 Step 4: Preparing Promotional Strategies

• Communication strategies are broad, long-term

guidelines for the IMC program
 Should be linked to opportunities and threats identified by the
communication market analysis
 Should fit with the company’s overall message, image, themes, etc.

• It is critical that the communications strategies be

directly related to a firm’s marketing plan and goals

• Once strategies have been implemented, they are not

changed unless major new events occur
 Only changes in the marketplace, new competitive forces, or new
promotional opportunities should prompt firms to alter strategies

1-17
 Step 5: Match tactics with strategies

• Tactics are activities performed to support strategies

• Examples of common tactics used:

 Specific advertisements
 Sales promotions
 Personal selling enticements for sales representatives
 Special product packages and labels
 Price changes
 Trade discounts to retailers
 Coupons, rebates, gift certificates
 Bonus packs (a 2nd product attached to a first)
 Contests and prizes
 Volume discounts

1-18
 Advantages to segmenting markets

• Identify company strengths and weaknesses

• Identify marketplace opportunities

• Match firm’s expertise with most lucrative markets

• Clarify marketing objectives with target markets

• Focus budget on market segments

• Link strategies and tactics to specific customer groups

1-19
 Tests to determine if a particular market
segment is viable
• Individuals or businesses within the segment are similar in

nature – i.e., are homogenous across relevant dimensions

 Have the same needs, attitudes, interests, opinions, etc.
 Respond similarly to marketing mix elements

• Market segment differs from the population as a whole

…and is distinct from other market segments

• Market segment must be large enough to be financially

viable to target with a separate marketing mix

• Market segment must be reachable via some type of

media or marketing communications method
1-20
 Ways to segment consumer markets

• Demographics

• Psychographics

• Generations

• Geography and/or geodemographics

• Benefits sought

• Usage

1-21
 VALS 2
Psychographic segmentation
 Innovators – successful, sophisticated – upscale products.
 Thinkers – educated, conservative, practical – durability, value.
 Achievers – goal-oriented, conservative, career, and family
 Experiencers – young, enthusiastic, impulsive, fashion, social
 Believers – conservative, conventional, traditional
 Strivers – trendy, fun-loving, peers important
 Makers – self-sufficient, respect authority, not materialistic
 Survivors – safety, security, focus on needs, price

1-22
 Psychographics and technology
Psychographic segmentation
 New Enthusiasts – cutting edge, eager, high
incomes/education
 Hopefuls – cutting edge, lack financial means
 Faithful – not eager, but not averse
 Oldliners – not interested in new technologies
 Independents – higher incomes, but do not value new
technology
 Surfers – ambivalent about new technology, cynical about
business

1-23
 Generation segmentation

Senior Gen. Y
5% Gen. X
Empty 14% 18%
Nester
13%

Younger
Older
Boomer
Boomer
26%
24%

1-24
 Generation segmentation
 Generation Y (18-24) – Clothes, automobiles,
college big ticket items. Spend heavily on TVs, stereos,
and personal appearance.

 Generation X (25-34) – Food, housing,

transportation, and personal services primary emphasis.
Time pressure so outsource daily tasks.

 Younger Boomers (35-44) – 60% own home.

Mortgage, home furnishings, home renovations major
purchases. Spend remaining disposable income on pets,
toys, playground equipment, and large recreational
vehicles.

1-25
 Generation segmentation (con’t.)
 Older Boomers (45-54) – Priorities are
upgrading homes, education and independence of
children, luxury items, exotic vacations, insurance,
and investments.

 Empty Nesters (55-64) – 80% own homes.

Mortgage, new furniture, new automobiles, personal
indulges.

 Seniors (65+) – Fixed incomes. Drugs, health

insurance, and health care major expenditures.

1-26
Ad targeted to senior citizens.
1-27
Geodemographic segmentation

 Combines
– Demographic census data
– Geographic information
– Psychographic information

 PRIZM
– 62 market segments
– Southside City
– Towns and Gowns

1-28
 FIGURE 4 . 11
Methods of segmenting B2B markets

• Industry NAICs/SIC codes

• Size of business

• Geographic location

• Product usage

• Customer value

1-29
A B2B advertisement
based on the product
usage segmentation
strategy...

1-30
 FIGURE 4.12
Successful globally integrated marketing
communications tactics

 Understand the international market

 A borderless marketing plan

Thinking globally but acting locally
 Local partnerships
 Communication segmentation strategies
 Market communication analysis
 Solid communication objectives

1-31