Point of Presence Advertising - Essay Example

Point of Presence Advertising Table of Contents: Introduction: In this short essay, the author presents an analysis of Point of Presence advertising which is carried out to attract customers through special offers, free gifts, discount schemes etc designed and executed at the retail outlet itself. In the end the author presented some short essays. Examples of Point of Purchase Advertising Recently, the author came across point of purchase advertisements and found them to be very effective. Two such purchase instances are presented herewith – Three DVDs packaged at lower consolidated price and the Memory Stick of Sony digital camera packaged with re-writable DVDs for Sony Handy Cam at lower combined price. The author planned to purchase a movie named Lord of the Rings – Fellowship of the Ring on recommendation of a friend and came across a pack of all the three movies of Lord of the Ring series at a price that was 20% less than the overall cost had the movies been purchased separately. The author realized that he anyway had to purchase the other two movies to complete the story and was delighted to get all the three of them at 20% discount. In the second purchase instance, the author was delighted to realize the value of the package as he owns both a Sony digital camera and Handy Cam. The total price was cheaper by 15%. Such product promotion advertisements resulted in positive impact on the author because the overall value of the buying decisions improved although the author didn’t had planned for part of the purchase. The effectiveness of these two “Point-of-Sale” advertisements resulted in win-win deal for both the store and the author – the store increased the net sale value and the author got more useful products at lesser cost. The author was not at all annoyed but was happy with the sales girl for introducing these offers. Massy and Frank (1966. pp383) presented the findings of an exploratory study on behavior of retailer advertising thus establishing some interesting empirical generalizations. They could prove that the brands sell differently in different stores and the support to a brand depends upon the brand’s market share in a particular store type. The author discovered a linkage of this theory with the research by Kumar and Leone (1988. pp178-179) which stated that many customer packaged good manufacturers have resorted to funding short term sales promotion at the store level which primarily has two distinct advantages – the effectiveness of promotions can result in on the spot sales activity and the store management takes pride into participating in on the spot campaigns given increased margins & commissions. Both the manufacturer and the store management gain in this process – the former achieves brand promotion & quick sales and the latter achieves improved profitability of the store. However the store management normally achieves short term benefits but the manufacturers achieve long term benefits by achieving strong customer franchise through brand substitution. From the author’s perspective one good observation about this model is that the on the spot promotional activities sometimes are effective enough to modify the purchase plan by the customers that they had made before visiting the store. Bucklin and Lattin (1991. pp24) observed that “point-of-purchase promotion is particularly attractive given the large pro-portion of grocery purchase decisions made after entering the store”. They further observed that “two-thirds of supermarket purchases are the result of an in-store decision”. Culturally speaking, such campaigns has promoted a culture of “fun buying” even avail such promotions to just find out what’s hot on the day and carry out on the spot purchase decisions. Many a times, customers just get impressed by the sales skills of the sales person and do not bother what brand they are buying. Hence the on-the-spot campaigning can also help in new brand introductions. This mechanism definitely helps in extending customer base much beyond the scope of market campaigning & brand promotions by organizations. Hence given the role of marketing executive the author would definitely recommend on spending on this type of advertisement on both brand substitution and new brand introduction. Discussion Points Massy and Frank (1966. pp383) argued that brands behave differently in different stores. This empirical generalization was taken as one of the baselines by the author in presenting this report. However, the author presents one question to be discussed on this matter – can there be a model for studying and analyzing such behaviors by store management as well as manufacturers? How can such behavioral patterns be used by the manufacturers and the store management to their respective benefits? This is the first set of discussion points that the author presents herewith. Kumar and Leone (1988. pp178-179) discussed about the joint efforts by manufacturers and store management in running short term campaigns with two way gains planned for both the parties. The author wishes to discuss the mode of operandi of such joint efforts. What should be the investments by both parties and how should they measure the return on investments? The author feels that it may be easier for the store management to realize gains through higher margins and increase in net sales. But what does the manufacturer gain – given that the reach of such advertisements may just be limited to visitors to the store? Can this be called marketing at all from manufacturer’s perspective or it is just an attempt to sell faster to meet targets? This is the second set of discussion points that the author presents herewith. Bucklin and Lattin (1991. pp24) presented the interesting phenomenon of unplanned purchases by customers through on the spot short term marketing promotions. But such a phenomenon makes the customer buying behaviour more unpredictable and difficult to quantify – and if the fact is that two third supermarket sales are happening through this phenomenon, then the organizations are compelled to carry out additional market research on such buying trends. How should the companies carry out market research on customer buying behaviours that are so unpredictable? Can there be a stochastic model developed to understand such complex and unpredictable buying behaviours? Conclusion: The author presented two sales instances related to point of sale marketing and discussed with the help of empirical generalizations that this is an excellent and fast mode to market as well as sell. In the end the author presented some discussion points on this subject. Reference List: Bucklin and Lattin (1991). A Two-State Model of Purchase Incidence and Brand Choice. Marketing Science, Vol. 10, No. 1. pp24. INFORMS. Retrieved on 15 April 2009. Available at http://www.jstor.org/stable/183873 (Liverpool Library). Kumar and Leone (1988). Measuring the Effect of Retail Store Promotions on Brand and Store Substitution. Journal of Marketing Research, Vol. 25, No. 2. pp178-179. American Marketing Association. Retrieved on 15 April 2009. Available at http://www.jstor.org/stable/3172649 (Liverpool Library). Massy and Frank (1966). Analysis of Retailer Advertising Behaviour. Journal of Marketing Research, Vol. 3, No. 4. pp383. American Marketing Association. Retrieved on 15 April 2009. Available at http://www.jstor.org/stable/3149854 (Liverpool Library). End of Document Read More