Promotion is referred to as a mix of elements used by a business to communicate to current and potential customers, its range of products or services. Getting the promotional mix right is key to the success or failure of a business, because, without promotion, there is no knowledge of your products or services, and no customers.
The 5 main elements of the promotional mix are advertising, personal selling, sales promotion, public relations, and direct marketing.
Advertising is the most common and efficient method of promotion. It enables a business to reach many consumers and can be used to disseminate messages about the products and services including features and points of difference to a competitor’s product/service. Advertising can take the form of television advertising, radio adverts, magazines, direct mail, billboards, internet, and newspaper adverts. The business has control over what messages are being delivered, and how they are delivered to the consumer. A disadvantage is that the delivery is non-personal and it is difficult to gauge its effectiveness as there is no direct system for feedback. The Seriously Good Chocolate Company (SGCC) could advertise in local newspapers, drawing on the history of the company, and in particular the use of her grandfather’s recipes, as a point of difference to competitors.
Personal selling is a direct face-to-face interaction with the customer. Personal selling presents opportunities to on-sell, such as an extended warranty or upgrades. A disadvantage of personal selling is the high costs of retaining an employee and incentives/commissions which may be paid for each sale, and the inconsistency of messages/information given to customers between sales people. The SGCC has a retail shop in Spey Street where they sell directly to customers. They could use these interactions to promote the purchase of wine and beer-infused or Kiwiana-themed chocolates, or factory tours and chocolate making classes.
The element of sales promotion is the addition of incentives to the consumer in an effort to create demand. Sales promotions take the forms of coupons, free samples or products given with each sale, contests, and loyalty incentives. The advantage of using sales promotions is that there is an immediate increased demand for the product/service during the promotion. A disadvantage is that when the promotion is completed, sales will drop. A sales promotion which SGCC could do is through promotions to existing customers, for example, buy 10 units get 1 free. They could also create awareness of new product flavours by providing samples for customers to try when in store.
Public relations is about creating a positive image for the product/service/brand/business. The audience is broad, ranging from current and potential customers, to shareholders, the media and public. A business can create publicity through being involved in community events, or writing a media release, donating prizes or sponsoring sports teams. An advantage of public relations is that it is mostly a free form of promotion, but there is little control over the messaging, and this is a definite disadvantage. The SGCC could identify and target an event to provide some sponsorship. For example, they could provide some sponsorship at a beer and wine festival and promote their wine and beer-infused flavours for purchase at the event. Another opportunity could be the promotion of the use of their natural ingredients at a farmers market in the local region, with samples, competitions, and prizes for events.
Direct marketing is a strategy which eliminates the middleman. It focuses on a direct relationship between the business and the end consumer, with the goal to creating a sale. The advantages of direct marketing means that the business can use a focused and customised approach with their target market, generating repeat sales. A disadvantage is the reliance on up-to-date information from databases and risks of violating legislation, for example, the Privacy Act. When a customer purchases from their store, or when they sign up on line for their newsletter or promotions, the SGCC could use this information to target customers through newsletters, advertising of events and promotions on their social media pages/website.
L McQuerrey (updated 2018), describes the objectives of a marketing promotion as being based on the goals and strategies of the company. In general promotional objectives are aimed at attracting new customers, increasing sales, raising awareness, or expanding market penetration. A mix of promotional elements are used to reach these objectives.
The SGCC is working to achieve the promotional objectives of brand awareness (particularly awareness of their gourmet range of chocolates), expanding market penetration (through the promotion of the chocolate making classes and factory tours and the introduction of their new flavours), and increasing sales to new and current customers (as they have moved to a new retail outlet in Spey Street).
Increasing product/brand awareness could be accomplished by being consistent in all marketing messages and using inexpensive promotional products (L McQuerrey,2018). SGCC could use small inexpensive products such as pens, branded gift bags/boxes, and calendars. Within this promotional mix, SGCC could also consider sponsoring an event. They will need to look at their social media (Facebook page), electronic newsletters, and website to ensure consistency across all of these promotional platforms so they can be easily recognised.
To expand market penetration SGCC could run an advertising campaign in the local newspapers, on their Facebook page, and electronic newsletter/website, to promote a special event, such as the launch of a new range of gourmet chocolates. They could also promote their factory tours to tourist groups (as part of a foodie tour of Invercargill), and to school groups (giving an educational spin to the tour). Through reaching out to a different group of potential consumers, they will gain market penetration and expand their customer base, thereby increasing revenues.
To further attract new and existing customers, expand the market penetration, and increase brand awareness, SGCC could launch a giftbox selection. This could include elements of advertising on Facebook, the website and through electronic newsletters to launch this new area of the business. The gift boxes could be branded with packaging to further promote awareness, along with giftcards. SGCC could launch this as an online product expansion where they would have both national and global reach.
Egelhoff (2012) describes two types of products – tangible and intangible, and how we market and advertise each one are vastly different. Tangible items can be held, touched and smelt, whilst intangible products can’t be seen, but still exist.
SGCC needs to promote a combination of tangible goods, and intangible services, and will want to carefully consider the promotional mix for each. The key to selling tangible goods is to promote the visual comparisons and benefits they provide. People don’t buy features, they buy benefits. Benefits also offset the price in the mind of the customer. (Egelhoff, 2012).
The tangible products SGCC sell are the chocolates, which are made using natural ingredients from local suppliers. They are available in a range of kiwiana and beer/wine infused flavours. SGCC need to promote these features, giving the customer enough information to evaluate a purchasing decision. They can apply all five elements of the promotional mix to create their marketing promotion. For example, they could advertise in a local newspaper describing their unique features and using photos of the products. SGCC could utilise social media, their electronic newsletter and website to create a buzz around the products, increasing sales and revenue. Another promotion would be a very specific direct marketing campaign, using their customer database, offering an evening where they can try the new flavours before they are launched to the general public.
When considering intangible products, the challenge is that you have to paint a word picture for your customer (Egelhoff, 2012). The intangible products SGCC offer are the chocolate shop tours and the chocolate making classes. SGCC could promote the tours through running a story (free advertising) in the local paper. They could include a brief history (Grandfather’s passion and recipes), pictures of customers enjoying the experience, photos of the chocolates, and a description of what they can expect to see during the tour. Along with this, there could be a coupon special offering discounts for groups of 6 or more, discounts for purchases made during the tour, and the invitation to sign-up to receive more discounts and promotions through the website. Once printed, SGCC would then run the story on their website as well and mention it, along with links, in their electronic newsletter. SGCC could run the same type of marketing promotion for their chocolate making classes as well. The story and associated photos could form a flyer for promotion of both services to tour groups. This promotional mix presents great opportunities for on-going promotion of the tours, and chocolate making classes.
The SGCC also supply their product to the Australian and Great British markets. They are considering expanding their international operations and are looking for retailers to stock their products in China. Their marketing goals are to promote product awareness, attract new customers (retailers included), and create sales. The promotional marketing mix will incorporate advertising, sales promotion and public relations.
Simon Kemp (2015), discusses the unique aspects in marketing to China, considering such factors as buying habits (for example, Single’s Day, and the Lunar New Year), the dynamics of social referral (peer-to-peer and social media recommendations), and the trend of online purchasing using a mobile device (applying QR codes “dotless visual codes” to product packaging so consumers can check product authenticity on their mobile phone).
Dudarenok (2018) a China marketing expert explains that China has a unique digital landscape, consumers have distinctive purchasing behaviours and there’s intense competition between home-grown and foreign brands, with Chinese viewing foreign brands as better quality products.
Advertising – The unique factors of the products, including increasing awareness of new flavours which align with the Chinese market preferences. SGCC could launch a product range specifically adapted for the Chinese market, for example, green tea or lychee flavoured chocolates. Culture may influence advertising and this needs to be taken in to account when developing an advertising campaign.
To increase public relations SGCC could attend trade events to create brand awareness. Wholesalers attend these events when searching for new products. Can launch new flavours for the Chinese market, will create trade contacts and build a positive public image, create brand awareness. They can utilise these events to run sales promotions for orders taken during the event, and to provide samples to attendees.
In a 2008 BDB International survey comprised of 100 in-depth interviews with Chinese business owners and senior purchasers, almost 40 percent of respondents indicated their preference to learn about supplier offers at an event. Chinese value foreign-companies who are willing to spend time and money to participate and demonstrate their commitment to the market. (Harrison ; Hedley, 2010). SGCC is a small company, but they could team up with other trade-related companies through the Trade and Enterprise and attend an event through this avenue.
SGCC could run a sales promotion aimed at retailers using personalised email communication, which is primary means of communication among Chinese businesses (Harrison ; Hedley, 2010). Such a promotion could include incentives such as the offer of free products and samples when they purchase a number of items. SGCC could promote the unique factors about the products, and generate a buzz to create brand awareness, and steer potential retailers and buyers to a well-designed, Chinese-language website, which is the most favoured way of learning about new supplier products and services (Harrison ; Hedley, 2010).
Product in the marketing mix – promoting the unique factors about the products, awareness.
Price in the marketing mix – pricing strategies – stay current but be flexible and adapt to new features and upcoming trends. For Western brands that are marketing in China, going digital is still one of the most effective approaches to reach out to and communicate with their target audience. Account for export price escalation, inflation, movements in currencies, transactional
Place in the marketing mix – which city to target – second-tier cities present the greatest opportunity. SGCC are looking at placing their products in retailers, so will need to research and target wholesalers in appropriate regions.
Promotion in the marketing mix – product promotion – advertisement. Consider using key opinion leaders, such as online celebrities who have large active followings to represent your brand. You can also use this form of promotion to track and analyse customer feedback and queries about your product.
Create a brand story which sets you apart – SGCC have a great brand story to share. Communicate the right values and create a unique experience to keep followers engaged. Create short videos (6 to 15 seconds long) to convey brand messages and engage with the audience.
Whether you’re localizing your brand, building awareness or driving sales, promotion with KOLs is always a good option. (Dudarenok, 2018). They are a good option for brands to amplify content without a huge promotion budget.
Describe an appropriate promotional mix using at least 3 of the elements above giving at least one example for each element. Then explain how your mix takes into account the following:
• Product factors – unique, natural ingredients, product flavours need to reflect the Chinese marketplace, for example using green tea as a flavour. Tap in to the positive association Chinese have with international products. The status of a foreign brand helps them to stand out from local competitors in terms of quality and reputation (source Marketing to China, 2017).
• Budget constraints – SGCC is not a large business and will have some budget constraints
• Customer factors – understand the people and the culture – Chinese research extensively online and on average spend 2 hours browsing the web per day, and in particular will research counterfeit products and lower quality local products (source Marketing to China, 2017). Tailor and adapt your marketing material specifically for the Chinese market. You can’t just translate the existing marketing material from English to Chinese. There are many nuanced and localised ways of expressing information, values and priorities.
• Culture can differentiate a standardised product from an adapted one. Making cultural changes in product attributes. The product should meet the needs, tastes, and patterns that are permitted by the market culture. (Global Marketing Mix)
• Sales factors – Use WeChat to actively drive traffic to your products through external links. SGCC will need to ensure that their content is of the highest quality. They also have a micro commerce platform for direct sales.
• Media factors – Understanding Chinese platforms for electronic marketing research WeChat, Weibo, Baidu and Youku – these platforms all have unique characteristics and are very effective for reaching their large, active and impressionable audiences. Additionally SGCC will need to understand the best set of keywords the Chinese are searching online (source Marketing to China, 2017).
These two platforms are both good channels to communicate with, acquire and retain Chinese customers. (WeChat and Weibo)
• Market expectations – with over 850 million Chinese now connected online China boasts the largest online community in the world. Online marketing offers the best exposure, reach, influence and return on investment (source Marketing to China, 2017).