Marketing Communications of Paragon Software Ltd - Case Study Example

Marketing Communications Paragon Software Ltd Introduction The use of exhibition as the sole marketing communication strategy is not enough to guarantee the company sales. The strategy has its own capabilities and limitations and without integration of the various marketing communication tools with it, the sales will not be exhaustive. It is imperative for the company to adopt other marketing communication strategies in relation to exhibition. The report will explore the benefits and limitations of exhibition as a marketing communication tool. The benefits and limitations will give an insight of how effective exhibition can be. The report will also explore the other marketing communication tools that can be used together with exhibition to promote the sales. Marketing Communication Marketing communication can be described as the process which attempts to advance the interests of the company, product range or the brand. It comprises of the following elements; personal selling, sales promotion, advertising, public relations, and direct marketing. The main purpose of marketing communication is to persuade the customer (Kimmel 2005, p1). Exhibition as a Marketing Communication Tool Exhibitions are very vital elements in the marketing communication strategies. These exhibitions have advantages and disadvantages. Exhibitions assist the organization to create relationships with the stakeholders on the basis of meeting face to face. There are varied reasons as to the use of exhibitions in an organization. Exhibitions come in three forms and each form aims at a certain group within the market; the consumer, the trade and both the trade and the consumer. The last category (exhibitions aimed at both the consumer and the trade) is the most common form of exhibition. Majority of the exhibitions begin as a trade exhibition and after a week or so, they become open to the public. A fee is paid by the public for entry into the exhibition. The fee is a source of revenue for the company. Most of the times, the products in the exhibition are of little or no interest to the public, thus, they may not purchase the products (Lancaster n.d., p1). Exhibitions can produce sales lead for the company. Immediate sales are achievable because the buyer comes to the trade fairs. New contacts of a business nature are made with the customers and even with the competitors. Positive media coverage is enjoyed by the organization through exhibition (Donaldson and Smit 2007, p86). Exhibitions at times are considered as a promotional activity. Capabilities of Exhibition as a Marketing Communication Tool Exhibitions are encompassed within the trade shows and trade fairs. These trade shows perform two functions; non-selling and selling tasks. The non-selling tasks include the following; creating and sustaining the company image, collecting competitor information, product evaluation and testing, and maintaining the company’s morale. The main reason why many companies hold trade shows is because of the benefits of non-selling tasks. However, the selling tasks also play a crucial role in organising these trade shows. The selling tasks include the following; identification of possible business opportunities, gain access to the major decision makers in the current and prospective customer companies, and get facts about the vendor services, products and personnel (Brennan, Canning and McDowell 2010, p191). The trade shows are very vital in the initial stages of the purchase decision making process and in the identification and qualification of potential new consumers. Trade shows have a positive effect on the sales efficiency and effectiveness. It has been argued that trade shows offer considerable savings as shown by the following statements: In a trade show, the initial contact with the potential new customer is cheaper (it can cost 60 percent less) than when a salesperson visits the customer in person. The amount of sales calls made by the salesperson is less compared to those made in the trade show. In a day, the salesperson can make 6 sales calls in a day and in a trade show the sales calls made in a day can be between 50 and 60. The sales cycle when initiated by the salesperson can cost more than when initiated by a supplier’s contribution in a trade show. The benefits of trade shows can be summarized on the basis of these four main groups; selling, promotional, research and strategic benefits. Selling Benefits The selling benefits are as follows; interaction with the existing customers, ability to create direct sales and obtain sales orders, capability of meeting new prospective customers and make up their list and the ability to meet new suppliers, buying decision makers, and distributors. The prevalent benefit is to meet prospective customers and the regular ones (Monye 2000, p125). Promotional Benefits Trade shows strengthen the communication mix. They are important in the promotion of existing products and good avenues for the introduction or the launch of new products in the market. The brand name through the trade shows is built, and they are a good source of technical information through the various demonstrations. Face-to-face contact reduces the communication process between the visitors and the exhibitors. Research Benefits The trade shows offer research benefits to the people involved in exhibitions. They are sources of information for gauging the competitor intelligence. They offer the ability of the company holding the trade fair to gather information from the marketing data and the general market. Response to acceptance of the new products is tested using the trade shows. Other than receptiveness to the new products, the trade shows test the entry of the company into new markets. Costs involved in market research in the trade shows are very low (Monye 2000, p126). Strategic Benefits Trade shows give up to date information of the current trends in the market place. The company is given the capability of establishing itself in the market. It also enhances competition with other key competitors in the business world. Other than providing the company with the latest trends in the market place, trade shows enhance the personnel morale and raise the company’s profile (Monye 2000, p127). Limitations of Exhibition as a Marketing Communication Tool Large sums of money are invested in coming up with exhibitions. Issues such as the amount of budget entailed in order to persuade a small target audience arise. Trade shows take a significant percentage of the amount of money spent as expenditure by the company; usually between 5 and 35% of the advertising money spend and between 5 and 20 percent of the overall marketing budget. Other than the money spent, a lot of time is spend by the senior management and the sales teams in the events. The return of the money invested in exhibitions is raising concerns in the business market. However, it is argued that there are significant savings in trade shows compared to individual selling (Brennan, Canning and McDowell 2010, p192). Integrated Marketing Communication (Exhibitions and Other Marketing Communication Tools) Exhibition is a dominant marketing communication tool; however, it requires coordination of resources and detailed planning. Exhibitions on themselves can not be very effective. The effectiveness of exhibitions can be enhanced by; (a) viewing probable series of exhibitions, (b) integrating them with other marketing communication tools, (c) selecting and planning well in advance, and (d) constant measurement of the exhibition effectiveness (Smith and Taylor 2004, p527). Integrated marketing communication has five basic tools; sales promotions, public relations, personal selling, advertising, and direct marketing. Exhibition strategies and styles will be discussed in relation to the integrated marketing communication tools. These strategies and styles include; market penetration strategy (customer oriented exhibition style), product development strategy (product oriented exhibition style), market development strategy (contact oriented exhibition style) and diversification strategy (advisory oriented exhibition style). (Beier and Dambock 2005, p66). Market Penetration Strategy (Customer Oriented Exhibition Style) The exhibitor attempts to boost the sales of the company with the assistance of the already established products. In other words, the exhibitor is attempting to penetrate the market. The old customers are persuaded to make higher sales while the new customers are encouraged to make the first time purchases. The attention is on customer relations and care. A strong customer oriented exhibition style is very crucial. The personnel are very important in discussing the areas of concern to the customers. Important marketing techniques include catalogue, on site map and professional journal, and booth (example is customer evenings) advertisement (Beier and Dambock 2005, p66). A marketing communication tool used in this is advertisement. Product Development Strategy (Product Oriented Exhibition Style) This strategy puts more emphasis on the sale of new products to the acquired consumers. The product is presented with the application possibilities leading to an exhibition style that is product oriented. The product is given special emphasis using marketing techniques such as sales promotion (giveaways, samples and coupons), organizers’ special shows, exhibition hall special events and direct mailing. The booth should be included when planning. The personnel should be given sufficient space for product usage and display (Beier and Dambock 2005, p67). Marketing communication tools used in this case are advertisement and sales promotion. Market Development Strategy (Contact Oriented Exhibition Style) The strategy depends on its availability to the market. If it is open to the new markets, the exhibitor has to gather new customers for the product. Three things have to be launched at the same time; product, company and brand. The trade show has to be very comprehensive as well as attractive. Special emphasis has to be given to open communication and new contacts. The booth should be made that it invites the consumers. Marketing techniques to be used are (a) simultaneous promotions such as exhibitor advertisement (handouts), advertising the announcement in daily newspapers or trade fair journals, and outdoor advertisement (advertising banners and transportation), and (b) sales promotion (lottery, price competition and giveaways) (Beier and Dambock 2005, p67). Diversification Strategy (Advisory Oriented Exhibition Style) Diversification of the exhibitor’s sales activities makes his tasks difficult. The exhibitor can not fully rely on the established markets; he has to look for new consumers. There should be a clear presentation of the product advantages and application possibilities. This can not be achieved without contacts and intensive consultation. Consultancy requires a quiet seating area and at the same time presentation of brands and products should be done. For easy doing of these tasks, the booth can be separated into two floors (Beier and Dambock 2005, p68). Conclusion Marketing communication tools are very vital in the promotion of sales of a company. Exhibition on the other hand is also used in the promotion of the company’s products. As discussed in the report, exhibition on its own can not guarantee enough sales for the company. The benefits of exhibition are many compared to the limitations. The limitations are confined within the setting up of an exhibition especially the high costs related to them. Several strategies have been considered in line with exhibition as a marketing communication tool. These strategies revolve around the styles to be used for a particular strategy. These strategies and styles make use of various marketing communication tools such as sales promotion and advertisement. In the case of Paragon Software, a number of strategies and styles can be used to increase the overall sales. Strategies such as market penetration, market development and product development can be very useful because the company deals with the design and manufacture of gaming software. A thorough use of these strategies will help the company to make more sales. As the director of sales, a few recommendations must be considered. The company should move from overreliance of only type of marketing tool technique. Exhibition attendance alone can not guarantee enough sales for the company, elements of marketing communication tools should be added. The company should keep itself up to date on the current trends in the market. This will help the company in making the right decisions about launching of new products, selection and gathering of new consumers, and the sustenance of these customers. The discussed strategies and styles will come a long way in identification, setting up and running an exhibition. References Beier, J. & Dambock, S. (2005) The role of exhibitions in the marketing mix [online], Ravensburg: University of Cooperative Education. Available from: [Accessed 18 January 18 2011]. Brennan, R., Canning, L. E. & McDowell. (2010) Business-to-business marketing. London, UK: SAGE Publications Ltd. Donaldson, W. & Smit, L. (2007) FCS marketing communication L2. Cape Town: Pearson Education South Africa Ltd. Kimmel, A. J. (2005) Marketing communication: New approaches, technologies, and styles. Oxford, UK: Oxford University Press. Lancaster, G. Marketing lectures [online], Durham: Durham Associates. Available from: < http://www.da-group.co.uk/index.php?option=com_content&view=article&id=18%3Athe-communication-mix&catid=2%3Amarketing-lectures&Itemid=3> [Accessed 18 January 2011]. Monye, S. O. (2000) The handbook of international marketing communications. Oxford, UK: Blackwell Publishers Ltd. Smith, P. R. & Taylor, J. (2004) Marketing communications: An integrated approach. London, UK: Kogan Page Publishers. Read More