Designing Promotion Strategy

Market target and positioning strategies guide promotion decisions as several activities are involved in designing an organization's promotion strategy including: 1)Setting communication objectives 2) Deciding the role of each of the components make in the promotion program 3) Estimating the promotion budget 4) Selecting the strategy for each promotion component 5) Integrating and implementing the promotion component strategies 6) Evaluating the effectiveness of the integrated promotion strategies.

Communication Objectives:

Communication objectives help determine how the promotion strategy components are used in the marketing program.Several illustrative communication objectives follow.

1.Need Recognition: A communication objective,which is important for new product introductions,is to trigger a need.Need recognition may also be important for existing products and services,particularly when the buyer can postpone purchasing or choose not to purchase.

2.Finding Buyers: Promotion activities can be used to identify buyers.The message seeks to get the prospective buyer to respond.Recall,for example,the use of the internet to obtain instant feedback as discussed in the earlier internet feature.

3.Brand Building: Promotion can aid a buyer's search for information.One of the objectives of new product promotional activities is to help buyers learn about the product.Prescription drug companies advertise to the public to make people aware of diseases and the brand names of products used for treatment.

4.Evaluation of Alternatives: Promotion helps buyers evaluate alternative brands and such evaluations may be a primary objective of promotion activities.Both comparative advertising and personal selling are effective in demonstrating a brand's strengths over competing brand.

5.Decision to Purchase: Influencing the buyer's decision to purchase a brand is an important promotion objective.Several of the promotion components may be used to encourage the buyer to purchase a brand.

6.Customer Retention: Communicating with buyer after they purchase a product is an important objective of promotion for many brands.Follow up salespeople,advertisements stressing a firm's service capabilities and toll free numbers placed on packages to encourage users to seek information or report problems are illustrations of post purchase communications.

Deciding the role of the promotion components:

Early in the process of developing the promotion strategy,it is useful to set guidelines as to the expected contribution for each of the promotion components.These guidelines help determine the strategy for each promotion component.It is necessary to decide which communication objective will be the responsibility of each component.

Determining Promotion Budget:

Isolating the specific effects of promotion may be difficult due to pursuit of multiple promotion objectives,lags in the impact of promotion on sales,effects of other marketing program components and the influences of uncontrollable factors.

1.Objective and task method: This logical and cost effective method is probably the most widely used budgeting approach.Management sets the communication objectives,determines the tasks necessary to achieve the objectives and adds up costs.

2.Percentage of sales method: Using this method the budget is calculated as a percent of sales and is therefore quite arbitrary.The percentage figure is often based on past expenditure patterns.The method fails to recognize that promotion efforts and results are related.

3.Competitive parity method: Competitive parity method is setting the promotion budget to match competitors outlays.Promotion expenditures for this budgeting method are guided by how much competitors spend.Yet competitors may be spending too much on promotion.

4.Affordable method: Since budget limits are a reality in most companies,this method is likely to influence all budget decisions.Top management may specify how much can be spent on promotion.

Promotion Component Strategies:

The strategies for the promotion components need to be consistent with market targeting strategy and contribute to the desired positioning of the brand.Determining the strategy for each promotion component includes setting objectives and budget,selecting the strategy and determining the promotion activities to be pursued.

Integrating and Implementing the Promotion Strategy:

Several factors may affect the composition of the promotion program advertising,public relations,personal selling,direct marketing,internet and sales promotion strategies have the potential to be fragmented when responsibility is assigned across several departments.

Effectiveness of Promotion Strategy:

Tracking the performance of promotion strategy involves-evaluating the effectiveness of each promotion component and assessing the overall effectiveness of the integrated promotion strategy.

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