The Promotional Mix

How would the promotional mix change at different stages of the product life cycle?

Promotional Mix: (citing Mr. Dougherty's definition) is the combination of promotional techniques that a firm uses to communicate the benefits of its product to customers.

PLC: As product enters the market, it goes through various stages. This time period is called product life cycle (PLC) and consists of the Introduction, Growth, Maturity, Decline. The goal of businesses is to sell as much product as possible and therefore has its PLC as long as possible. In order to this, people use extending strategies to prolong maturity or limit decline.

 

Introduction
During this stage, company is trying to establish a customer base, which is crucial for the success of the product. For the sake of good impression and popularity, importance is given especially to advertising that undergoes many tests. Also because the product not popular yeat and lot of money is put into its introduction, the company's profit is negative.

Growth
In this stage, the product is well known. The profits starts to increase, but so does competition. Therefore, the owner starts to focus on brand preference and how to please the customers. Because of the increasing competition and the desire to keep customer's patterns in your business, you must invest money into advertising, which causes the profit to go down at the end of this stage.

Maturity
At this stage, product is very popular and the competition is huge. This leads to decline of product life and therefore most businesses try to extend the maturity of product. Mostly loyal customers buy this product and the businesses start to rely on promotion heavily. They offer loyalty based promotions such as membership cards and also care more about the placement of the product.Businesses encourage retailers to give more shelves to their product than the competitors.

Decline
During decline stage, product's sales go decrease due to unfavorable economy, changed customer's taste or may be also as a result of technological advancements. In this case it depends on the business's strategy. They can keep the product but reduce its cost and find new use to make it more attractive to the customers. 
 They can also sell this product as a very low price to the loyal customers until the profit is zero or discontinue the product completely by selling it to competitor's who want to continue this product. Another option is finding a successor of the product.






Sources:
http://notesdesk.com/notes/marketing/product-life-cycle-plc/

Case Studies in Promotional Marketing

Case studies are taken from this website: http://www.aptcoweb.com/news/casestudies.htm


Museum gets huge membership boost

Since museums are centers of education, it can be said that memberships are mainly aimed to attract people who either want to or have to get educated, for example students and families with kids.
As a promotion they used scratch-off cards with possible prices and therefore to "play the game". This type of technique is called the Game Technique and it is effective because it, in a way, gets the target addicted to the possibility of winning.


AMC butters up sports fans with popcorn offer

In the hometown of AMC, Kansas City, this company decided to attract the home entertained couch potatoes. Because many of these people are enjoying the football season, AMC decided to give away 10,000 key chains that, if presented at the cinema, enables the owner one free popcorn. This raised AMC's customers by 40%. This type of promotion was targeted at sport fans and home-entertained people and was very successful because people love the sense of getting free stuff (in reality they had to pay for the ticket).


Nike Incentive Program Boosts Attendance

Nike employs its workers all around the world and loosing them would mean a huge loss to the company. To improve the attendance of the workers, Nike created a one year plan, giving out specialized mugs particular to each quarter of the year and given to the workers with perfect attendance. This created a competition between workers and the desire to get the different mugs and other accessories that Nike gave out. At the end of the campaign all the Nike facilities reported perfect and improved attendance by over 200%.


Unexpected product works for Fitness Center

Usually fitness centers give out sport related gifts such as water bottles, sporting bags or towels. However, APTCO worker realized that the people attending fitness centers already have their own items of this nature. Some of them carry/wear them but most of them don't. Therefore she decided to give out a practical gift, an umbrella with the company logo. This gift attracts people who go to or want to start going to a fitness center. It is effective because umbrellas are always needed, since they are easy to use and the company logo will be therefore seen by all the people passing by the umbrella owner.

Types of Advertising Techniques

Price Appeal
-consumers will get more for less money
- This is beneficial because people are more attracted to cheaper things

Testimonial

- shows a famous person in the advertistment how they endorse the product

-This way of advertising attracts many people. It makes them think that if the sucessful famous people can use that product, then it's very likely to be good. In this particular case of Pepsi, 3 famous singers are rewarded with Pepsi after an idirect fight.

http://www.youtube.com/watch?v=W7jkygJ_QNo

Sex Appeal
-This type of advertising promotes the enhance owner's sexual attractiveness
- Sex appeal is one of the most used type of advertising because good looks are one of the most desired wishes in people

Logo
-Identifies product with a symbol
- If the logo becomes popular, it becomes identity for 'cool'. Therefore people want to buy it more because thy want to keep up with the style.







Wit and Humor
-Attracts customers by making them laugh with way of communication.
-It's a beneficial way of advertising because it sets positive mood for the customers and make them feel that this product will make them feel happy.

- http://www.youtube.com/watch?v=Z_hwMtG2xCs






Name Calling:
- Comparing products in a way that shows one product as superior to the others
- When the consumers see two products compared and are given reasons why one is better than the other one, they will want to buy it more.

 

Facts and Figures

- Includes statistics and objectives about the product.

- Advertisers would advertise details that are appealing to the customers and that would, in comparison with other brand, make this product superior

 

Emotional Appeal

-Uses viewers emotions for the purpose of supporting their case/ buying their product. Example of this are happyness, sorrow or patriotism

- This way people are psychologically pressured to buy/ support product or service. Most useful emotion is probably pity the advertistments show, as in the Stop Animal Cruelty campaign, that gives viewers sense of "you can help these poor anymals, if you want to" and makes them feel guilty if they don't.

http://www.youtube.com/watch?v=9gspElv1yvc





Slogan
-connects product with an idea or a thought

-this is beneficial for the business because, like in the Nokia case, people connect the product with the slogan. In this case slogan connects people, which is positive think and therefore people will think positively every time they hear about this product or think of the product more often when they hear the slogan or the phrase about connecting people











Confusion
- At first it gains consumers attention by confusing them and then concludes it by bringing up the point
- Confusion pretty much traps the thoughts and attention of the viewer. Once they are too interested to stop watching the commericial, the ad gets to the point.

https://www.blogger.com/blogger.g?blogID=2669362492757507440#editor/target=post;postID=979753033921827530

Informative Advertising

Definition: Type of advertising that provides consumers with information about service/ product and give it some official credibility.

Examples:

1. Alcoholic beverages that say "Don't drink and drive"
2. Cigarette boxes saying " Smoking Kills"
3. Twinkies that come in 100 calorie pack and show it on their box

                                       
 How does this advertising work?

This advertising informs people about the product they are buying. Specifically, it brings up details that are most attractive to them. For example, Twinkie Bites are type of candy. Candy is sugary and sugary stuff have lot of calories and make people fat. In today's society, being overweight is one of the biggest problems, whether they are health related or self-image problems. At the same time, however, people love these sugary calorie-filled foods, so the best way to balance the two aspects is to make food with not as many calories. In this case, Twinkie Bites became the smaller version of full sized Twinkies with only 100 calories instead of 146 calories in a Banana Twinkie, 150 calories in the classic Twinkie, 281 calories in a Strawberry Glazed Twinkie and 425 calories in a Fried Twinkie. In other words, Twinkies will not get limited as much because the advertising lets the specific "dieting" social group know that it is OK to still eat Twinkies.




Limitations of this advertising?

In the case of cigarettes, alcohol and other legal harmful substances loved by people, products are required by law to advertise their flaws. for example, cigarettes say that they cause lung cancer, that they kill and that they are harmful also to non smokers. These informative advertising serve to make people dislike the product and therefore they may stop buying it.







Which businesses would do this?

Food and drinks all include the informative aspect. Also, centers of education, such as zoos may advertise fun facts about animals and colleges advertise the graduation rates. Pretty much any service/ product that includes "attractive" facts will use this type of advertising.

Synovate

Who they are and what do they do?

Synovate was an organisation providing research services. Since it officially became part of Ipsos in 2011, the specialities of this organization are advertising, marketing, public affairs research, media, customer loyalty and survey management.


Where are they located?

Ipsos is now located in 84 countries all around the world. The headquarters is located in London, UK.




History of Synovate:

Synovate was founded in 1994 as AMI consulting and was part of the Aegis Group plc (media and digital marketing communications group). It was formed of multiple smaller market research firms and thus had more divisions including Synovate Healthcare, Synovate Customer Experience, Synovate Censydiam and Motoresearch. In 2009 it had 5,968 employees and took the sixth place on "Top 10 of the Market Research Sector 2006", ahead of its future parent Ipsos (seventh place). In 2011 Ipsos bought out Synovate for more than half a billion pounds and the two integrated in early 2012. Nowadays, Synovate is part of Ipsos and its services are therefore found on their website.


What are their methods?

Ipsos researchers analyze potential market trends, test products and advertising, "help build long term relationships with customers", study public and measure public opinion worldwide. All this happens thanks to their method of analyzing, observing and asking people the "right questions" which consist of people's expectations, desires and opinions. One method to do this is an online survey where people get paid.
 

 

 

 

Sources:

http://en.wikipedia.org/wiki/Synovate

http://www.ipsos.com/Experts

http://sk.linkedin.com/company/synovate

Ethics in Business and Lance Armstrong

Ethics in business are actions that aren't required by law yet necessary for keeping businesses running, in terms of behavior towards others in the field.
Ethics are important to business because they affect its success. As mentioned before, ethics are not required by law. But if a business does something that disturbs its customers or sponsors, their income will decrease and may eventually result in bankrupt.
The issue in Lance Armstron affair was that a very successful, non-profit , cancer fighting organisation, Livestrong, lost its most supportive sponsors.The reason is that the main representative of this organization, Lance Armstrong, was accused of using performance-enhancing drugs.
Nike terminated its contract with Livestrong. However the " plan to continue support of the Livestrong initiatives created to unite, inspire and empower people affected by cancer". In other words, Nike left its options open; if Armstrong is proven to be a cheater, Nike will withdraw its support. But if the cyclist proves his innocence, Nike will go back to fully supporting Livestrong and Armstrong.
This action may be beneficial, since the organization itself still gets some money. Nike may also inspire other organizations such as Michelob Ultra, Trek Bicycle and Radio Shack to do the same.
I personally think that Armstrong's doings are, indeed, a big turnoff. As a chief operating officer of Burns Entertainment, Bob Williams, said "...fans don't take kindly to alleged cheaters enhancing their on-field experience". At the same time Lance Armstrong is the founder of a very successful non-profit organization who helped to raise $500 million over its operating years. Sponsors should realize that Armstrong's mistakes shouldn't affect people for whom this organization was build.

Stakeholder Conflict at TESCO: Exam

Fuel delivery drivers to strike

• Conflict happened between the internal stakeholders; particularly between the owner and employers.
• Problem occurred when the employees' job, pay and conditions appeared under threat by transfer  from Wincanton to another company, TDG.
• The negative impact that is very likely to occur is already announced strike of 140 drivers and will last for two days. Therefore company will loose money for these two days.
• My advice is to transfer the employees and not only let them keep their job but slightly raise their pay.

 

Tesco wins pay battle

• Conflict occurred between the interior stakeholders, shareholders (NAPF,GKS) and the Tesco board members.
• The problem is that Tesco board members want to rewrite rules of board members despite the fact that only 59% of those voting were supporting it. Voting was about raising the payment which would result in doubling the current salary of the board members. Shareholders from NAPF abstinented from vote (17%) and GSK was completely against it.Yet, the shareholders cannot against the board members because of the record profit growth in past year.
• Possible and very likely outcome is weak profit growth and falling share prices fueled by investors' resentment and shareholders' dissent.
• Compromise, in this case, would be raise the investors' pay but not as much as doubling it. They would also have to manage to keep the profit growth.
•                             

 Will protests hurt the Tesco brand?

•  Problem occurred between the external and internal shareholders; the community, owners of smaller shops, possibly the Tesco suppliers and its investors.
• Tesco, with its annual £2bn profit, steals customers not only in its home area but also abroad. It has2,300 stores in 13 countries and continues to colonize. It various services, that originate in groceries, expanded to areas of electronics, clothing, fuel insurance policies and other financial services. By this, Tesco affects independent store owners and drives them out of business ( 2000 small food retailers in UK alone) since it can afford to give lower prices.
• Possible outcome is to reduce Tesco's power and break it up by pointing out its faults and by that make people to stop buying there. Another problem results in shareholders in other countries that serve as farmers workers and suppliers for whom Tesco is their only source of income.
• My advice is to stop its "interest area" growth. Instead of continuing to include, for example, the  financial services, Tesco should focus on why they even started. If Tesco started out as a grocery store, it should stay that way. On the other hand, if they should be left alone otherwise, because if they were good enough to make it to the top their crown shouldn't be taken away easily.
• One of many anti-Tesco signs. Tesco's original slogan says "Every little helps".                    

                   



Opposition to fourth Tesco plan

• The stakeholders are interior and exterior; Tesco versus the community and the city council.
• Problem is that Tesco already has 3 sites in one city, giving the nickname Tesco Town to the town of Iverness. The Highland Council said that another Tesco is not needed, since they already have Tesco mania, however, Tesco still keeps on pressuring. 
• If another Tesco is built, it will pulverize every business that was left and therefore many people will loose jobs. 
• My compromise solution is to abort another Tesco in the area and leave all the others there. This may seem as a win situation for the community, but let's be honest, being surrounded by 3 Tescos is bad already. 

                                                   

Northern Foods to shed 900 jobs

• Complications are between the Tesco management and the suppliers.
• Conflict is based on closure of Tesco-only dedicated pastry plant, Trafford Park Bakery, which cuts 690 jobs. It is also reducing  They will also reduce employees by cutting 210 people from another Northern Food plant called Palenthropes. Tesco does this because they made loss of £3m.
• The problem is that 690 loyal employees from company that is dedicated to Tesco will loose their jobs without replacement because other sites don't have enough capacity. Also people are pointing out to Tesco's social irresponsibility.
• My personal advice is to pay people money for couple of extra months, since they are firing them and help to find replacement to as many of them as possible.. 
•