Promotion stratigies

Companies develop marketing strategies to build a loyal customer base, to build relationships with those customers and to create value for the customer. Effective product and promotion strategies are essential in making sure your product is readily accessible in the global marketplace. Special considerations are necessary when marketing to global customers such as international issues of technology, transportation and regulation.

Extension

A straight product extension is presenting your product to a global marketplace without any changes. Some products are globally known and need no additional product or promotion changes. People want the product on a global basis, and once it is made available to them, it is purchased without having to create any additional marketing or promotion strategies.

Adaptation

Production and promotion adaptation strategies are used in a global market for a product that may be popular but needs to be adapted to meet local customs and demand. For example, customers of less affluent countries may need a product of similar quality that has been downscaled to be more affordable to purchase. Technology products must be altered to meet the specific language of the country being marketed to.

Invention

Another product and promotion strategy is inventing a new product to meet the needs of a particular country. For example, consumers in crowded commuting conditions might need a laptop product that better fits their travel situation, a more compact version of the typical laptop. This strategy also could take on the form of reinventing a popular product to meet the needs of a particular country or world region.

Pricing Considerations

Global product and promotion strategies must take into consideration the economic conditions of the country where products are introduced. For example, a price that might be discounted in the United States would be considered too high for poorer countries or perhaps not high enough in rich countries. To combat prices being too high in less affluent countries, a company could make a smaller or less complex version at a lower price.

Marketing mix (Price, Place, Promotion, Product)

When marketing their products firms need to create a successful mix of:

• the right product
• sold at the right price
• in the right place
• using the most suitable promotion.

To create the right marketing mix, businesses have to meet the following conditions:

• The product has to have the right features - for example, it must look good and work well.
• The price must be right. Consumer will need to buy in large numbers to produce a healthy profit.
• The goods must be in the right place at the right time. Making sure that the goods arrive when and where they are wanted is an important operation.
• The target group needs to be made aware of the existence and availability of the product through promotion. Successful promotion helps a firm to spread costs over a larger output.

For example, a company like Kellogg's is constantly developing new breakfast cereals - the product element is the new product itself, getting the price right involves examining customer perceptions and rival products as well as costs of manufacture, promotion involves engaging in a range of promotional activities e.g. competitions, product tasting etc, and place involves using the best possible channels of distribution such as leading supermarket chains.The product is the central point on which marketing energy must focus. Finding out how to make the product, setting up the production line, providing the finance and manufacturing the product are not the responsibility of the marketing function. However, it is concerned with what the product means to the customer. Marketing therefore plays a key role in determining such aspects as:

• the appearance of the product - in line with the requirements of the market
• the function of the product - products must address the needs of customers as identified through market research.

The product range and how it is used is a function of the marketing mix. The range may be broadened or a brand may be extended for tactical reasons, such as matching competition or catering for seasonal fluctuations. Alternatively, a product may be repositioned to make it more acceptable for a new group of consumers as part of a long-term plan.

The price

Of all the aspects of the marketing mix, price is the one, which creates sales revenue - all the others are costs. The price of an item is clearly an important determinant of the value of sales made. In theory, price is really determined by the discovery of what customers perceive is the value of the item on sale. Researching consumers' opinions about pricing is important as it indicates how they value what they are looking for as well as what they want to pay. An organisation's pricing policy will vary according to time and circumstances. Crudely speaking, the value of water in the Lake District will be considerably different from the value of water in the desert.

The place

Although figures vary widely from product to product, roughly a fifth of the cost of a product goes on getting it to the customer. 'Place' is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It will be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers.

The promotion

Promotion is the business of communicating with customers. It will provide information that will assist them in making a decision to purchase a product or service. The razzmatazz, pace and creativity of some promotional activities are almost alien to normal business activities.
The cost associated with promotion or advertising goods and services often represents a sizeable proportion of the overall cost of producing an item. However, successful promotion increases sales so that advertising and other costs are spread over a larger output. Though increased promotional activity is often a sign of a response to a problem such as competitive activity, it enables an organisation to develop and build up a succession of messages and can be extremely cost-effective.

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