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According to Kotler (2008), promotion includes all the tools and techniques in the marketing mix whose central role is persuasive communication. In simple term promotion can be defined as that integral element of the marketing mix, which is aimed at increasing the visibility of a product. Promotion aids marketing managers to communicate relevant information to the consumers. This information can relate to the existence of products or the benefits and values that the product offers or both. A properly designed promotion strategy is very important for positioning and brand building (Banerjee, 2009).
While selecting a promotional give away organizations must take into consideration a number of factors. Firstly, the promotional efforts must be focused on the segment which is most likely to purchase the product and should create an emotional connection with them. For instance, Dove has managed to identify and benefit from emotional bond. The target audience is females. The company makes use of pictures of ordinary women rather than models. Through this feature it has been able to reach out to a vast base of female customers and connect with them on emotional terms (Carrillat and Astous, 2012).
Secondly, the unique selling proposition of a product need to be identified and then the marketing message should be centered on it. For instance, the ads of Marlboro were an epitome of how a brand can create a lifestyle around its merchandise. The promotional campaign was effective as they captured and presented the dream lifestyle of every man. Hence, it can be inferred that a promotional campaign should fit into the lifestyle of target audiences, even if it is a romanticized one (Culliton, 2008). Thirdly, promotion should be based on the stage of product life cycle. Apple’s iPhone was on a maturity stage. However, with the introduction of the Samsung Galaxy S2, the market share of iPhone fell drastically. But the company launched its new introduced iPhone 5 with outstanding features and unparalleled marketing campaign. Through this, it gained back its popularity (Eastman, Ferguson and Klein, 2012).
Market research is defined as gathering information about customers, rivals and the efficacy of their marketing campaigns. Market research is generally utilized to identify the feasibility of new businesses, testing interest in new goods or services, improving facets of their businesses like, distribution channels, customer service and developing competitive strategies. Comprehensive market research is equally important for both established as well as new businesses (Ettouzani, Yates and Mena, 2012). The financial risk related to investment decisions is considerably reduced with the help of this research. Through market research five types of information are obtained i.e. related to market, products, pricing in the industry plus promotion and distribution in the market. An organization gets to know about the likely acceptability of its product or service, consumer perceptions of fair and just pricing, efficacy of advertising and effectiveness of the different distribution channels (Kenneth, 2007). Information through market research is obtained by conducting surveys, through the chamber of commerce, psychographic profiling, trend spotting, talking with similar businesses and through focus group discussions. Both primary and secondary information is obtained.
Companies in all sectors are operating in a competitive business environment. Therefore, by making an evaluation of its rivals, a company can identify its weaknesses, opportunities and threats. During the phase of strategy formulation, senior management ought to take into account the strategies used by organization’s rival firms (Brown, 1993). Competitor analysis starts with determining the existing and potential rivals. A well thought out evaluation of competitors enables a corporation to focus on those companies, which are in its direct competition and it is even more significant when new competitors are encountered. With the help of this analysis, market can be studied comprehensively which will provide information relating to demand and supply, existing trends and patterns in the market, the forthcoming trends of the sector, strengths and weaknesses of competitor’s prevailing strategies plus their future strategies (Kitchen, 2013). With the help of the above mentioned information, an organization will be able to formulate its own strategy for growth; will be capable of implementing its expansion and diversification plans effectively and will address its opportunities and threats properly. Porter’s five force model is one of the widely accepted competitor analysis tools. The information is mainly primary in nature (Kotler, 2008).
Product life cycle is the progression of a product through a series of life stages i.e. from introduction to development, maturity and its ultimate decline. The marketing situation in each stage of the life cycle changes and this impacts both the marketing mix and strategy. The different stages involve different strategies related to the four elements of the marketing mix (Park, 2004). It provides substantial information to organizations regarding the effectiveness of their products and strategies. For instance, Diet Coke a product of Coca-Cola reached its maturity level within three months of its launch (Shimp, 2010). It captured 5000 regions of its supply chain. These statistics furnish relevant information to the company as it can decipher all those aspects which contributed to the immense success of Diet Coke. With such information, it can repeat its success in other products as well whilst maintaining the same level in Diet Coke. On the other hand, if a product faces quite an early demise than the marketing managers can learn the critical failure factors and not repeat them in the future (Wood, 2009).
The main P's of the marketing mix i.e. product, price, place and promotion. These are tactical and controllable marketing tools, which work in synergy to help attain the objectives of an organization (Vargo and Lusch, 2004). The 4Ps is the most fundamental analysis before a company goes for further analysis like STP (Segmentation, Targeting, and Positioning). This assessment is basically used by businesses to design their corporate plans either short term or long term. A marketing mix model is often used by companies to determine the manner in which to take their new product to the market. This tool is also utilized to test the prevailing market strategies (Kim and Mauborgne, 2009).
The importance of market research in the context of the retail industry is quite high. The development of this sector has been on the basis of democratization of consumption due to an economic model of low price. This model was based on offering affordable prices to consumers (Riley, 2012). Marketing was not considered as an important factor. However, the widespread expansion of this sector which was the bedrock of its growth is now over. Retail giants like Tesco have grown considerably to attain the top position mainly because of meticulous market research (Park, 2004). The company analyzed the perceptions of its potential customers regarding supermarkets, the effect of internet on retail selling, market for direct selling and etc. The success of its online endeavor can be attributed to market research (Culliton, 2008). Fashion retail outlets like Marks & Spencer have risen way above from ground level by researching on different aspects of apparel retailing i.e. latest fashion trends, affect of mixed retailers on the growth of fashion retailers and etc. However, market research may also have some disadvantages for the retailers. Huge cost and time will be spent on research the retail sector. Apart from this, market research is carried out in an open market wherein various variables act upon the research settings (Banerjee, 2009).
The competitive structure of the retail sector is quite complex. There is impending international involvement. Here competitor analysis plays a significant role in marketing and strategic planning. Taking the example of Sainsbury which is one the leading retailers of food in the UK, traced the strategies followed by its rivals i.e. Tesco, Morrison and ASDA to identify both competitive benefits like greater customer access and shortcomings as compared to their rival firms (Ghoshal and Westney, 2006). In addition to this, by identifying higher bargaining power of customers in this industry, the company has incorporated the espousal of green standards in its strategy as customer loyalty is the key to success. Nonetheless, competitor analysis can also have some drawbacks in the retail sector. As retailers are offering diversified goods and services therefore, competitor analysis has become very time consuming and complicated. In addition to this, getting excessively occupied in keeping track of products and strategies of rivals might lead to atrophy of actual originality of design and strategies (Bergen and Peteraf, 2002).
Analysis of product life cycle is especially important for fashion retail houses. Fashion witnesses immediate growth and decline and it is important for specialist retailers to keep a track of the life cycle of fashion products sold by them (Tibben-Lembke, 2002).
The 4Ps of marketing are equally significant in the retail industry. Four main factors of successful retailing are a selection of high quality product, competitive prices, seamless integration of clicks and bricks and memorable promotion and excellent service. Taking the example of Costco, the retail company has included quality brands and name brands having good repute in its stores (Constantinides, 2010). Its success lies in keeping a relatively small selection of merchandise as compared to its arch rival Wal-Mart. The prices are kept consistent and reasonable. The website is very user friendly and consumers can order merchandise as and when desired through the internet. The promotional campaigns of the company are very effective. However, the main disadvantage of this model is that even if a single element goes wrong then it spells disaster for the entire process (Haywood, 2012).
Thus, it can be concluded that market research, competitor analysis, product life cycle and 4Ps play a very important role for the success of an organization.
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