Promotion and Place Project - Research Paper Example

Promotion and Place Project Table of Contents Introduction 2 Product place strategy 3 Promotional strategy 4 Integrated marketing communication (IMC) 6 Promotional Mix 8 Conclusion 11 Reference 13 Introduction Though research and development has become the new forte of companies aiming to make it big in this competitive world, the importance of marketing strategy in achieving ultimate sustainability has survived the test of time. Promotion and product placement, the two pillars of marketing plan, are instrumental in promoting new products in the target market. After analysing the product features and the market dynamics, it has been decided to follow price leadership strategy for the new energy drink. Henceforth, the company has decided to maintain low profit margin per product in order to sell products in huge mass. This will provide economies of scale, and thus the profitability of the new venture will improve. While developing the marketing plan for the new energy drink, the company is at first required to finalise the place strategy. This implies the manner in which the product is placed in the target market. Later on, planning will be done for product promotion. The company will develop its integrated marketing communication plan to convey the required message to the target customer base. Promotional mix for the new product will be developed to identify which promotional tools should be used to attract and retain potential customers. While developing the marketing plan, the company will take into account the marketing tactics followed by the competitors. To enhance the effectiveness of the marketing plan, some innovative and creative promotional tools have been planned. This will make the whole marketing process attractive for the customers. Product place strategy “Place” is one of the vital elements of a product mix and plays an important role in the marketing plan of any product or service. The term “place” refers to the distribution of the product from the manufacturing point to the customers (Gitman & McDaniel, p.295). Once the new product is launched in the target market, it is necessary to ensure that it is readily available to the customers. This is only possible if the company has an effective distribution channel. The place strategy deals with physical distribution of the product. Hence while developing the place strategy, the company needs to finalise the activities associated with storage and transportation of finished goods to the target market segment (Lamb, Hair & McDaniel, p.47). The company can either develop its own distribution channel or it can hire a distributor who takes the responsibility of distribution in lieu of certain payments. Both these choice has its own advantages as well as disadvantages. If a company develops its own distribution channel, it will have better control over it. This will also provide an opportunity to minimise the cost associated with distribution process. However, this will require handsome amount of investment in the initial years, which might again result in high venture capital. For a new venture, arranging the required capital is not easy and such investment often enhance the financial cost associated with the entire project. On the other hand, distributors may not provide required flexibility to the company and often the payments charged are quite high. This increases the cost of operation and profitability may deteriorate. However, these distributors have a sound knowledge of the local market, which the company can use for its own benefit. After taking into account the pros and cons of both the system, it has been decided that the company will hire a local distributor for placing the new energy drink in the target market. While selecting the distributor, care should be taken to ensure that the distributor possesses a dense networking in the target market and has the relevant experience of handling distribution of FMCG products. The company will attempt to target the super markets for selling the product. This is because, these local super markets have high customer feet fall. The greater the number of people visiting these super markets, the higher is the chances of selling the product. Regular visitors can be asked to try the free samples of energy drink and provide their feedbacks on taste, flavours, type of packaging and other valuable recommendation. Apart from the super market, the product will also be available in the local retail shops. This will increase availability of the product and will make it more accessible to the customers. Promotional strategy The term promotion refers to the manner in which the company is planning to promote the product in the target market. While developing the product promotional plan, the main aim is to develop the link between the customers and the company. With the help of promotional process the company tries to convey the required information to the target customers in a planned and well synchronised manner. Therefore the dual motto is to reach the target customers and at the same time fulfil the corporate goal of the company. Before developing the product promotional plan for the new energy drink, the company has decided to seek answers to some basic questions. As for example, how do customers make their purchase decision and which is the most effective method to reach the target customers. Again, the company will conduct required analysis to find out the factors that influence the decisions of buyers and consumers. In certain cases, the same person can be the buyer as well as the consumer but again in other cases buyer and consumer can be two different people. “Influence” is the one who influences the consumer to make the purchase. Doctors, health consultants and dieticians are considered as potential influencers for the new energy drink as because they provide guidance or suggestion to the target customers. The same is true for the buyer because in most families, it is the lady who often decides which products should be consumed by the family members. Therefore, the buyer should be convinced regarding the benefits associated with the health drink. The consumer is the one most important because the product is actually consumed by him. Therefore, while developing the product, the company should pay equal attention to all these three individuals involved in the purchase process. The company has decided to promote the product as safe energy drink that can be easily used as a substitute for soft drinks. Therefore, the product is placed as a “Cool Drink” among the target customers. The young generation can easily be convinced to purchase products which they find cool and popular among their friend groups. Therefore, the message should be presented in a way such that it attracts the immediate attention of the youngsters. The message should also target the parents of the youngsters so that they can motivate their children to have this new energy drink as a substitute of carbonated soft drinks that possess high sugar contents, caffeine and alcohol. Once the message to be conveyed is finalised, the next step is to find out different promotional strategies to be used. The company will take recluse to massive advertisement to make product popular among the target customers. Direct sales will also be carried out. ‘Direct force’ will visit different shopping malls to sell the products directly to the customers. They will also be responsible for collecting customer’s feedback and addressing their problems. The sales force will visit different target market to distribute free samples. At the same time, the sales person will convey vital information regarding the product to the youngsters. Hence, the main role of the sales force will be to educate the customers by making them aware of the benefits associated with this new energy drink as compared to other prevailing energy drinks in the market. The company is also planning to use internet as the medium of direct marketing communication. The company’s website will act as a platform where the customers can directly communicate with the company, ask questions, provide suggestions, in brief the whole gamut of correspondences that will help it to attain the customer’s level of expectation. Integrated marketing communication (IMC) To make the communication process more effective, it is essential to ensure effective coordination between different marketing communication tools. While developing the integrated marketing communication (IMC) plan, the company will have to take both internal as well as external factors into consideration. The above given chart illustrates the factors needed to be taken into consideration while developing the integrated marketing communication plan. There are two main promotional strategies to be followed by a company while developing integrated marketing communication plan. Either it can be “Push” strategy or it can be a “Pull” strategy. When a company advocates to its distributors to push the product in the target market, it is called push strategy. On the other hand, if the company motivates the customers to purchase the product, then it is called ‘pull strategy’. For promoting the new energy drink in the market, the company has decided to focus mainly on the pull strategy. The company is planning to distribute free samples of the product so that target consumers are exposed to the benefits in return of which they will make further purchases. The company has decided to make high investments on advertisement and other promotional activities like chat shows where the customers will be encouraged to participate in an open discussion with different doctors and dieticians on the benefits of using this health drink over others which are high on sugar, alcohol and caffeine. This will assist in motivating and educating the customers. For advertisement purpose, both print as well as electronic media will be used. However, the advertisement budget will not be too high. Therefore, the company has decided to rely more on word of mouth publicity because it is cost effective and authentic way of persuading the customers. As the company will hire a distribution channel, some of the push strategies will be employed through it. The distribution channel often provides different promotional services as value added services. These services will assist the company to make the marketing plan more effective. Promotional Mix Promotional mix is the process of using different promotional tools to communicate with the target customers. The commonly used promotional tools are advertisement, public relation, sales promotion, personnel selling and direct marketing. The company has decided to use all these promotional tools to promote the product in the target market. Each of these tools has been discussed in details in the below given section. 1. Advertisement: The Company has decided to develop an innovative advertisement strategy for the new product. The advertisement should be such that the message is directly communicated to the target customers. Therefore, the company will introduce an imaginary character who will act as a metaphor for the present youth. This character will behave like the present youth. His dressing style, way of talking and living style should appear “Cool” to the target customer. This will help the target customers to develop a strong psychological attachment with this imaginary character. These advertisements will be displayed on different electronic media like television. The company will also introduce these advertisements on internet because the youngsters are more attached with internet. The company will use hording and posters where the same imaginary character will be portrayed to convey the message. 2. Public relation: Public relation is a very strong tool for communicating with the target customers. The company has plans to arrange different chat shows on internet where the interested customers can directly chat with the doctors and dieticians to clear their doubts. They can ask questions and take suggestions to make their day to day life healthier. In future, the company may sponsor sports events to publicise the new energy drink. However, this strategy will currently be kept on hold because the marketing budget might get affected because of it. 3. Personal selling: Through personal selling, companies try to make face to face communication with the target customers and motivate them to purchase the products. However, such tactics will not yield much result in case of the new energy drink. Therefore, the company has decided not to rely much on the sales force for selling the product. Their role will be limited to the collection of information from different selling points regarding customer behaviour. They will visit different shopping malls and will interact with the customers to know their experience and possible recommendation. The company will try to keep as few sales people as possible as because their monthly salary might distort the marketing budget. 4. Sales promotion: The Company will depend more on sales promotion tools to attract the new customers. As per the plan, the company will offer discounts if someone make purchase in bulk. In festive seasons free coupons will be distributed to the regular customers. To attract new customers, free samples will be distributed along with other products. 5. Direct marketing: The Company has decided to make use of its website for developing direct relationship with the customers and for conveying the required information. If required, the company will use instant messages to inform the target customers regarding different promotional offers available at specific shopping malls. Conclusion The company has decided to frame an innovative marketing plan for attracting the target customers. There are several energy products available in the market which makes it highly competitive. Hence, before introducing the new energy drink in the market, the company will be required to develop its place and promotional plan. As the company is new to the target market; it will be difficult for it to develop its own distribution channel. Also, developing the supply chain is a costly affair and the pre-decided budget may get disturbed. Therefore, it is more feasible for the company to rely on third party distributors, who have the required expertise by virtue of their experience. The company is more likely to use “Pull” strategy while promoting the product. Hence special attention will be given to aggressive advertisement, public relation and direct marketing. However, the company will use its sales force mainly to collect information related to consumer behaviour. Several innovative and creative sales promotions techniques will be taken into account to attract and retain customers. Reference Gitman, L. J. & McDaniel, C. The Future of Business: The Essentials. Cengage Learning. 2008. Lamb, C. W., Hair, J. F. & McDaniel, J. C. Essentials of Marketing. Cengage Learning. 2008. Read More