Promotional Strategy That Should Be Used in the Development of the Strategic Marketing Plan - Assignment Example

a. Identify the appropriate place and promotional strategy that should be used in the development of the strategic marketing plan. 1) Develop an initial sales promotion schedule. Typical sales promotion tools are coupons, contests and premiums. These tools focus on attracting the attention of the consumer, offering him/her an incentive and inviting him/her to buy. A push and pull strategy will be implemented. Since 300 pubs and a number of restaurants buy Diageo’s products, a strategy inducing them to promote the brand by displaying the product will be necessary. At the same time a price discount will be offered to the ones selling more. The same tools will be applied to super markets where a free trial of the product will be offered to customers during the introduction stage. In addition, Diageo targets the following groups: young generation, working women, working men with ages ranging from 20 to 60 years old and the international markets. Since Guinness Ice is in a can form which makes it easy to sell in super markets, a 15-cents off coupon can be distributed in super markets especially during the introduction stage. During the growth stage a redemption coupon will be given. This tool is considered appropriate for the elder group category since they are traditionally more price sensitive. The frequency of the sales promotion campaign will be three weeks per quarter and the optimal duration will be the length of the average purchase cycle. 2) Create an advertising plan The target groups are: young people, working women, elder people. The ad’s main message will focus on the healthy side of the product i.e a light beer for customers preferring low carbohydrate but at the same time the moderate consumption of beer will be promoted. The latter is based on the fact that a person that does not drink is 60% more likely to have cardiovascular disease versus a person who drinks moderately. The advertising campaign will include the following: television advertising because Guinness Ice is a consumer good, TV advertising reaches a broad spectrum of consumers and especially good for building brand image especially for products like beers where there is no actual product differentiation. TV advertising can be a compelling means for dramatically portraying brand personality. TV is also very effective for reaching teenagers/young people. Print ads will be another tool of advertising campaign. The print ads will appear in newspapers and magazines. In newspapers because elder people usually read them and magazines because young people and women read them. Magazines have the additional benefit that the ads in them have long life and there is good pass- along readership. Billboards in public places such as movies, airlines, sports arenas, bus shelters and kiosks are also going to be used since there is a need to grab the attention of the consumer and it is in accordance with the product’s strategy i.e. reaching untapped market segments. Finally, there will be communication at the point-of-purchase i.e. in supermarkets and pubs. In supermarkets ads on shopping cart, in-store trials and coupons will be part of the campaign. In addition, there will be the logo name on the supermarket floor. In pubs, there will be posters on the walls and napkins with Guinness Ice name on them. P-O-P advertising is very appealing and according to studies 70% of all buying decisions are made in the store. Advertising plan Media Appearance Budget ($- thousands) TV spots 1st & 3rd quarter 10,000,000 Print ads 2nd quarter 3,000,000 Billboards 1st & 2nd quarter 2,500,000 P-O-P ongoing 500,000 Total 16,000,000 3) Identify public relations opportunities for the product/service. Marketing public relations assist the launch of new products, influence specific target groups and they consist of low cost activities. They should be planned jointly with advertising. There are many PR opportunities for the product. In the beginning the product should be helped by press releases. At the same time the medical research regarding the health benefits from moderate beer consumption needs to be promoted. Organizing contests and competitions for younger people will also be used. A major sports event will be sponsored and a percentage of beer sales will be given to sports schools. The visual identity of the brand should be carried in company’s stationery and building. 4) Analyze the impact of channel management decision on the marketing or your selected product or service. Select appropriate distribution channels for your product or service and address costs in terms of placement, shipping and middlemen. In order to reach a large geographical area and a large number of customers and due to the fact that the product is FMCG the level of channel that will be followed is the 2nd i.e. manufacturer, wholesaler, retailer, consumer. The wholesalers will be chosen based on their size, credibility in the market, specialization in the sector, logistics capability i.e. they should be in the position to deliver fast the merchandise and be able to serve as many retailers as possible especially retailers like pubs, hotels, restaurants and supermarkets which are the places where Guinness is mostly purchased. Since the product is FMCG and there is the need for the manufacturer to place it in as many outlets as possible the strategy that will be followed is intensive distribution. Intensive distribution increases product availability but the company should be careful because it may also increase retailers’ competition and it may harm in the long term brand equity. The selection of wholesalers helps Guinness to decrease distribution costs since they bear the costs of storing and transporting. There would only be an increase in P-O-P costs for the retailers since the intensive distribution strategy implies that many retailers will be involved thus increased distribution costs. b. Develop a budget for your plan The budget was developed based on the objective and task method which is the fairest method in establishing a budget. The following steps were followed (Kotler p. 554): 1. Establish the market share goal 2. Determine the percentage of the market that should be reached by advertising 3. Determine the percentage of aware prospects that should be persuaded to try the brand 4. Determine the number of advertising impressions per 1 percent trial rate 5. Determine the number of gross rating points that would have to be purchased 6. Determine the necessary advertising budget on the basis of the average cost of buying a gross rating point Actions Appearance Budget Sales promotion ongoing 3,000,000 TV spots 1st & 3rd quarter 10,000,000 Print ads 2nd quarter 3,000,000 Billboards 1st & 2nd quarter 2,500,000 P-O-P 1st & 2nd quarter 500,000 PR Ongoing 250,000 Channel costs Ongoing 600,000 Various Ongoing 150,000 Marketing Research 1st & 3rd quarter 5,000,000 Total 25,000,000 c. Identify quantifiable elements that can be used to evaluate, monitor, and control the effectiveness of your marketing plan. The performance will be monitored by the following: revenue achieved (monthly and annual) per activity/channel, expenses (monthly and annual) and customer satisfaction. Customer satisfaction will be measured by conducting a customer satisfaction research. In case problems arise then corrective actions will be taken. Sales promotion will be evaluated by scannering the sales data and by analyzing the types of people that benefited from the promotion. Marketing Public Relations will be measured based on sales-and-profit impact and the management’s estimation on the extent that MPR contributed to the total increase of sales. Advertising is harder to measure. The measurement approach that will be followed is the historical one i.e. correlating past sales to past advertising expenses. In general, communication will also be measured in terms of the communication impact on the target audiences i.e. recall of the message, feelings about the message, purchases of the product and favorable talking to others about it. Channel effectiveness will be measured by the number of sales achieved. References Kotler P., Keller K.L. (2006): Marketing Management12e, Pearson Prentice Hall Rosenbloom B.j (1995): Marketing Channels: A Management View, 5th edition, Hinsdale. Sissors Jack Z., Baron R.B. Baron:Advertising Media Planning,6th Edition, McGraw-Hill. Read More