The “Canhole” promotion strategy will enhance overall Keystone Light brand engagement by way of facilitating interaction, acceptance, and sharing by consumers in line with the company’s second objective. The innovative and engaging nature of the promotion will shift the way customers interact with Keystone Light and also add value, purposefulness and personality to the brand, hence helping the company to achieve this objective.
Internet and Social Networks
Cruisers can initiate a virtual format of Canhole, whereby membership and usage are rewarded through earning points which can later be exchanged for gifts, trips, cars and other rewards. This way, cruisers can use the game to create online communities with similar tastes and preferences. The company can encourage Cruisers to do so by availing precise data about the target audience in terms of needs, preferences, personality, as well as psychographic and behavioral variables. Lastly, the Maslow’s hierarchy of needs is applicable to this situation as it assists the Cruisers to identify the needs of the target audience, hence providing the online Canhole campaign with purpose, meaning and direction (Ward & Lasen, 2009).
Product Involvement
Available literature shows that “product involvement relates to an established and long-lasting connection with a product or brand” (Bruwer & Buller, 2013, p. 40). Consequently, the Canhole promotion can be used to ensure that consumers establish long-lasting relationship with the Keystone Light brand. Such a relationship will assist the company to increase the overall brand engagement, hence successfully achieving the second objective.
Cross Merchandising
The company can use beer magazines and water manufacturing companies to serve as cross merchandising opportunities for Canhole. Due to the extroverted and fun-loving personality, most Cruisers are likely to be fans of beer magazines to keep ahead of the latest trends in the social scene. Additionally, most Cruisers are likely to consume water in between drinking rounds and Canhole games to keep rehydrated. As such, the company can make use of these marketing opportunities not only to increase brand sales but also to enhance convenience and value addition (Hayer & MacInnis, 2008).
Cruiser’s Personality Traits
Ingenious – the Cruiser demonstrates very smart and clever ways of beating the prevailing financial hardships to have fun.
Extrovert – the Cruiser values friendship over all else and has developed a reasonable number of beer pyramids that are dependent on social occasions.
Fun-loving – the Cruiser demonstrates a preference to share memorable experiences with buddies and also to crack jokes while drinking.
Question 6: Cruiser’s Psychographic Profile
Cruiser is a simple person with simple needs, although he likes to live and enjoy life to the fullest based on resourceful and inventive planning. He does not spend so much thinking about food and expensive lifestyles as he likes to live within his own means. However, he likes to hang out with his drinking peers and the intensity of these interactions increases during the summer. Cruiser values spontaneous, memorable experiences that are as a result of ingenuity and inventive social occasions, not mentioning that he is a free spirit who likes to crack jokes and act younger while enjoying his beer with buddies.
Segments
The three segments that are likely to include a large number of Cruisers are
up-and-comers,
blue-chip blues, and
white picket fences.
All these segments are in the middle-class, implying that they have some money to spend on social occasions though they still have a lot of responsibilities to meet. All consumers in the selected segments are young (<45 years), demonstrating that they may still be interested in having some good time with friends over a couple of beers. They have to spend their money resourcefully and inventively as they have to meet other expenses such as paying rent, implying that most eat out at fast food joints. This makes the ideal Cruiser.
References
Bruwer, J., & Buller, C. (2013). Product involvement, brand loyalty, and country-of-origin brand preferences of Japanese wine consumers. Journal of Wine Research, 24(1), 38-58.
Australian bank customers have had a very bad perception about the country’s banking sector. For instance, many customers believe that banks are closing branches to cut costs. This is a misconception as the country is ranked well with 25,000 banking access points per one million residents when compared to countries like UK, Singapore and France (Australian Bankers Association 2010, p. 8).
Customers should also know that the sector has real competition among various banks. After deregulation, transaction accounts are now available in 24 banks, 177 credit unions and 14 building societies (Australian Bankers Association 2010, p. 11). It should also be known that competition has reduced interest margins to less than 2% (Australian Bankers Association 2010, p. 13). Most of these customers believe that banking services are not affordable. This is a misconception as transaction fees accounts for only 1% of banks revenues (Australian Bankers Association 2010, p. 17).
Therefore, this will be communicated to different people and customers to do away with these misconceptions. In this case, TV will be effective in reaching a wide mass of people. This is because it is mostly accessible and adverts can be made appealing to different age groups (Westpac 2010, p. 8). Other forms of promotion will also be used to reach individual target groups. Public relations and sales promotion will give individual target groups the attention they deserve and in the process explain all they need to know. Personal selling is very interactive and can be tailor made to suit different interests.
Because there is a good advertising budget, all banks will be covered in this campaign as it’s an all industry affair (Australian Bankers Association 2010, p. 26). This will pull together their efforts in reaching a wide mass of people. Therefore, all banks will be required to input their contributions on the way forward.
Reference List
Australian Bankers Association., 2010. Fact sheets on banking industry. Web.
What is the distribution channel? What is the relationship between channels of distribution and logistics? How does geographical location affect your selection of distribution channels?
A distribution channel involves firms and a group of people who are responsible for transferring a product from manufacturers to consumers, or buyers. A distribution channel includes producers, buyers, and intermediaries, such as wholesalers and retailers. The main purpose of a distribution channel is to meet the needs and concerns of the target customers, as well as the objectives of different parties concerned (Kapoor and Kansal, 2004, p. 28).
While considering the movement of products from the point of production of goods to the potential consumers, it is purposeful to refer to the role of physical distribution, which is closely associated with logistics. In common terms, logistics involves the flow of materials, from acquiring the raw materials for manufacture, buying component parts to distributing the final product to the potential buyers.
At this point, logistics encompasses two key operations – material management and distribution management (Kapoor and Kansal, 2004). Judging from the above-presented definitions, the distribution channel is more premised on marketing strategies of allocating goods in terms of market segmentation and demand whereas logistics ensures efficient distributions and guarantees on-time delivery of goods.
Geographical location plays a pivotal role in product distribution and promotion. Due to the growing trend of industrial decentralization with regard to the location sites, the manufacturers are concerned with the effective physical distribution operations to meet the needs of companies and customers (Kapoor and Kansal, 2004, 15). Hence, distribution management can improve transportation, private and public warehouse, and market area analysis.
What are the similarities and differences between promotional push strategies and promotional pull strategies? Examples of push and pull strategies
Companies make use of push and pull promotional strategies to create consumer demand for a specific product. Hence, a push promotional strategy implies using the company’s trade tradition and force sales to increase the customer’s demand. In contrast, a pull promotional strategy relies on advertising and promotion to increase consumer demand (Armstrong et al., 2009). The main similarity between the two strategies lies in their goal to increase customer demand. The difference lies in the means by which the promotion is carried out.
One of the relevant examples of push promotion is selling mobile phones by Nokia manufactures. The producers promote phones through retailers’ Warehouse. In this respect, trade promotion and personal selling are successful promotional tools because they can offer subsidies and encourage retailers to promote higher volumes of phones (Armstrong et al., 2009). The main peculiarity of a push promotional strategy consists of promoting a product and pushing it directly to the customer, omitting distribution channels.
Children’s toys promotion is a bright example of a pull promotional strategy. It is premised on television advertising and promotional campaigns. Because children are fond of cartoons and animated movies, they would definitely want to buy a toy resembling a cartoon hero. As a result, companies make use of physical distribution channels to promote the product and make the customers buy it (Armstrong et al., 2009). The main peculiarity of a pull promotional strategy is based on promotional chains where consumers will inform the retailers about their needs, the retails will inform wholesalers who, in their turn, ask the manufacturers. In other words, the pull promotional strategy has an inverse approach – from a customer to a producer.
What does the term noise mean in marketing? With so much advertising noise in the marketplace, how can a company ensure its message is heard?
Noise is marketing is closely associated with the advertising techniques stimulating consumption. While communicating an idea, concept, or promoting a product, the term ‘noise’ refers to the constant flow of advertising ideas, concepts, and campaigns, which prevent newly emerged products to be noticed by consumers (Hackley, 2005, p. 30). Within advertising ‘noise’, creating an effective product promotion campaign is a serious challenge because the manufacturers should work out strategies that would prevent ‘noise’ messages from interfering with their advertising process.
In order to avoid miscommunication and eliminate marketing ‘noise’, there should be ads that would capture the customer’s attention. At this point, it is necessary to introduce active and passive research to identify whether the consumer actually needs a product or not (Hackley, 2005, p. 31). Through active research, surveys, polls, and questionnaires can be introduced to define how often consumers make use of different communication channels. Searching for information during the adequate course of events is passive research, another level of attracting attention (Hackley, 2005, p. 31). Finally, a consumer often obtains passive information without any effort made.
All three channels should be taken into consideration to define why a consumer makes use of those channels. With regard to the type of product consumed and the sources of information used, the advertising should development its promotion strategies. Overall, ensuring customer’s cognitive engagement with the advertising message increases chances for the successful promotion of a product.
References
Armstrong, G., Harker, M., Kotler, P., and Brennan. (2009). Marketing: An Introduction. US: Pearson Education.
Hackley, C. E. (2005). Advertising and Promotion: Communicating Brands. US: SAGE.
Kapoor, S. K., & Kansal, P. (2004). Basics of Distribution Management: A Logistical Approach. US: PHI Learning Pvt. Ltd.
We provide a service many people tend to overlook, dry cleaning. Now, when you hear dry cleaning you might be inclined to automatically think about your usual drop off Monday and pick up Wednesday deal; but what makes us unique is that we plan to offer something much more personalized, and much more luxurious. What is the one thing everyone wishes they had more of? Time. If you add up the time that it takes you to sit in traffic, drive to the dry cleaning spot and drop off your clothes, I bet you could think of at least five things you would rather be doing.
Our service would be easy to access; you have the option of either scheduling on our website or using our App; either way, we can guarantee that your order will be treated in the urgent manner that you deserve.
Our main goal is to help business people and their affluent cohorts who do not have enough time to do their laundry. We will have different deals and membership levels. We will also provide what is called “membership” which will include a varying number of full service 24-hour door-to-door calls and a lesser number of last-minute “red carpet services” that will allow the client their items to be laundered and dry cleaned in as little as 2 hours.
The red carpet service allows our customers to call at any time day or night and have their clothes ready for their big meeting or event. In addition, we will be providing a free shoeshine service for “red carpet service” visits. We plan to offer group memberships to our most prestigious local corporate offices at a special group rate in order to extend our services to their powerful and affluent employees. Each employee would receive one free delivery service when they are boarded to the company. This will allow us to gain access to every employee’s personal data through our customer relationship management software, and have it filed into our market research database.
Mission Statement
Overnight Star Service has the mission to obtain leadership in our market of residential delivery dry cleaning and personal laundry services. Our excellence in service is based on innovative ideas that contribute with personalized solutions for our clients, offering them the safety of having, in that opportune moment, reliable service, and high quality. The absolute satisfaction of our service represents our main purpose, a difference that distinguishes us significantly from the competition, making this a virtue, we offer only the best presentation to our customers. For such purposes, we have an efficient team of highly skilled and fully motivated customer concierge specialists to provide a first-class service.
Segmenting and Targeting Market
The market of Overnight Star Services in the Tampa Bay area is present but certainly not saturated. The only approaches to laundry services available consist of your typical self-service or drop-offs with a drive-through. We are trying to find a way to better cater to the latter; this group is composed of people who use the traditional drop-off service but would tremendously benefit from something more personalized and convenient. According to our studies, our target market will be composed of a social group that maintains the following characteristics:
Age
The average age of our customers should fluctuate between 26 and 65 years. This makes it possible to include young professionals who are just perching atop their respective fields as well as more experienced professionals who know the importance of appearance, making a good impression, and efficient time management in the business world.
Gender
The service we offer is targeted towards executives, regardless of gender, who value their time at a higher rate than the premium required for membership.
Income
Overnight Star Service focuses our service specifically on upper-middle class and affluent members of the business, social, and non-profit community organizations.
Social Class
Our goals for Overnight Star Service will channel a strong corporate affinity. Our customers are individuals who have a strong sense of pride in their white-collar status. Upper Middle class to upper-class clientele.
Lifestyle
The profile of our customers can be defined as young professionals or married power couples who know that good service often comes at a greater cost. Our clientele works hard, but plays harder, and won’t settle for anything less than the creme de la creme. We are targeting people who are so busy with work, that they savor and indulge in the little free time they have.
Positioning
The Service Mix
Place (Distribution) Strategy
Overnight Star Service will have an extremely focused distribution channel. We are a web and app-only based system. You must request our service through a smartphone application or not at all. We plan on launching our service directly. We want to kick-off marketing exclusively through offices. Ideally, what this will look like is having our business cards in breakrooms with a scannable QR code to download the app and launch your first service free. The user will immediately be prompted to input their personal pick-up information (location) and payment information (credit or debit card) into our CRM. Immediately following requests of a “rapid red carpet” service the app will launch a countdown clock to the time specified by the user.
Promotion Strategy
The only promotional items we will be using are our business cards, hangers, and garment bags. These items will be extremely high end. We would like to have all black felt finish hangers with gold accents. Our company logo will be discreetly printed on the center of the hanger and we will have sleek black polyester garment bags with gold buttons on the bottom. The hangers will be complimentary; the garment bags will have a discount incentive on membership costs if returned.
Price Strategy
Our pricing strategy will be based on a membership and rewards plan. Ideally, we would like to create a service that will charge monthly dues, much like a country club, or gym membership.
Membership Level
Services Included
Silver
2 full service requests a month
Gold
4 full service requests a month
Platinum
6 full service requests a month; including 1 rapid red carpet
Diamond
8 full service requests a month; including 2 rapid red carpet
All-Access Black Diamond
Unlimited full-service requests; including 4 rapid red carpet
Resources
To accomplish our goals we will need a substantial start-up investment. We want our employees to be trained and rehearsed to the highest standard of customer service, hospitality, and craftsmanship. Our service will be executed via multiple mobile full-service vans, though the customer will never see these discrete sleek and black Mercedes sprinters, they will comprise the aspect of the entire operation of our business. The mobility of our salon sprinters will allow us to achieve our deadlines and then some.
Our staff will be subservient and conspicuous, much like the demeanor of a member of the presidential secret service member or bodyguard. They will keep the volume of their voice and gestures to the minimum. We want to create an all-encompassing experience of mystery and exclusivity.
This campaign is going to revolve heavily around member referrals and subtle product placement among the very elite, powerful, and revered members of society. We will approach a handful of very key centers of influence in the community and offer them three months of unlimited free service. This group will be comprised of select CEOs, socialites, and local celebrities known for their exquisite taste and enviable lifestyle.
Actions & Delivery
Our customers would have to request our service through our App, and for this, they have two options. The first one is “Full Service,” and the second option is “Red Carpet Service”. After receiving our customers’ request we will have our Black Mercedes Sprinters go to our customer’s locations to pick up their clothes; the cleaning process takes place inside the vans. After that, we will have our customers’ clothes waiting for them on our black hangers and protected by our garment bags.
Both the hangers and the bags are going to be very high in quality. The hangers will be complimentary; the garment bags will have a discount incentive on membership costs if returned. The Red Carpet Service allows our customers to call at any time during the day and have their clothes ready for their special occasion or meeting. Shoe Shine Service would be provided for those who requested the “Red Carpet Service”.
Supply Chain
Our supply chain will revolve around servicing and staffing the Mercedes Sprinters we will launch from our three main warehouse hubs. We plan to have one warehouse in the Tampa/Miami area, one in the New York City/Metropolitan Area, and one in the Los Angeles/Hollywood area. These warehouses will also serve as tech headquarters where our specialists will oversee orders and membership requests coming into the app, human resource and staffing operations will take place, marketing offices will be established, and where our five-star customer concierge training and development operations will take place.
Our supply chain planning is based on the flow of information. Knowing our needs exactly allows us to establish an optimal level of supplies. This will prevent a surplus or deficit in supplies used in our service that could affect our costs and/or the normal flow of our operations.
Overnight Star Service information systems will control the mobile service units to determine the availability of supplies needed to operate with autonomy for 24 hours. After this period, the unit will return to our warehouse to receive maintenance and supply the Mercedes Sprinter with the necessary supplies. Because part of our company is selling our customers a time-sensitive service, we will need to strategically station our loaded on-call Sprinters over our service area equally in relation to each other to ensure expedited service in the situation of a “red carpet service request”.
We will use advanced GPS information technology systems to be able to direct our sprinters where they need to be to ensure we always have an on-call unit no more than 45 minutes away from any given location in our service areas. The system will need to be highly collaborative in order to facilitate our cars being called on and off active duty.
Likewise, Overnight Star Service information systems will constantly report to our office the quantities of supplies needed to maintain an optimal stock in our warehouse. This information will help our office to project the number of supplies to be requested by our providers. Additionally, our providers will be permanently connected with our information system to meet our requirements at the established times. One way to minimize our operating costs is to timely sign contracts with our supplies or services providers, which will allow us to obtain the best conditions in the negotiations, similar to a just-in-time inventory management system.
Marketing Channel
Since we are offering a service and not a material good we seek to use intermediaries in the form of promotions. The companies that we initially partner up with in order to collect data and to promote our service will be our intermediaries. We will also be using non-traditional intermediaries approaches like social media in order to get our customer’s attention. This will be discussed more extensively in the promotional mix section.
Star Overnight Service will have a direct sales channel. This means contact with our customers without intermediaries. Interacting with our customers will allow the company to receive direct information about the satisfaction and needs relating to our service. Any modifications to the strategies developed to improve the service and/or costs will be based on this information. Star Overnight Service will interact with customers via phone, email, and social media in order to get our customer’s attention.
Distribution Intensity
Our level of distribution intensity will be that of selective distribution. Seeing as we will be starting out in the Tampa Bay area with plans to expand to major cities like New York, Miami, and L.A, our service will be available exclusively in these areas.
Promotional Mix
Advertising
Since we will have access to every employee’s personal data through our customer relationship management software, as we mentioned in the overview, we will be sending e-mails to employees telling them about our service and explaining to them how they can benefit from our service.
We will also put our advertisements on social media websites such as Facebook, Twitter, and LinkedIn. The main objective of this digital marketing plan is to attract the youthful customers’ market through the company’s website and a Twitter fun page in order to increase customer traffic in its stores. The objective aims at packaging the laundry services as a favorite of the customers who frequent social media and actually share a common communication culture. Apparently, this segment forms the largest bracket of those who are targeted by the advertisement plan. The use of social media to attract this market segment is achievable since the target market frequents social media as a site for interaction and shopping for similar services.
Advertising will be involved in increasing the visibility of the company’s website through search engine optimization. Search engine optimization for the Overnight Star Service website will be achieved by installing plugins that possess extra features such as page navigation, thumbnail, and customized page numbers. Specifically, this proposed system in Google will consist of a multi-tab page that will serve different areas and services to online customers.
The main categories may be laundry ordering menu, e-newspaper/magazines and brochures related to common services, shopping (duty-free) for customized laundry options, and a guide on cost for each type of service at the Overnight Star Service. Using tools that allow us to track who visited our website, we will use visitor’s digital footprint information to better aim our advertisements to potential leads who might actually be interested in our service. This advertising method will allow us to better communicate with our target market at a lower cost per contact.
Consumer Sales Promotion
As we stated in the advertising plan, we seek to use different methods of online communication such as email and social media in order to promote our product. Another part of our plan regarding consumer sales promotions is the inclusion of a free first-time trial deal, in which new customers only get to try any of our services worth up to $30 for free, in the hopes that this incentive will create a new consumer base that will eventually grow into a mutually beneficial relationship.
In the Overnight Star Service’s promotional strategy, there will be coupons for customers who pay for certain services, and everyone is a winner. There will be the component of the campaign for the discount promotion is web and store for the proposed service coupon. To promote the coupon, the Overnight Star Service will deploy many advertisement mechanisms like word of mouth, publicizing through leaflets, online advertisement through its website, the announcement of the promotional offer, promotion by the use of local media, social media, and billboards at the entrance of the store. The Overnight Star Service will operate on the business pillars such as persuasive merchandise, balanced business channels, and establishment of assessment in service delivery through the promotional coupons. These strategies are aimed at ensuring continuous expansion and customer satisfaction.
Public Relations
As part of our public relations strategy, we would like to implement a strong presence on social media sharing techniques. Our primary goal will be to target centers of influence on Instagram. Customers with 4,000 followers or more, who are already members of our elite service, will receive one additional free “red carpet service” every time they receive over 500 likes on a photo tagged with #OSSredcarpet.
In addition to our most affluent customers, we will also offer our incentive membership services to notable Hollywood stylists who exclusively service celebrity clientele. We will channel their connections in an attempt to position them as intermediaries to sell memberships to their high profile celebrity clientele. If we are able to penetrate the Celebrity market, we will secure our position as a coveted and prestigious service indicative of reputable social status, and effectively establish dominance in a market that will create exponentially positive public opinion.
The business will employ the laggard activism strategy to not only capture the market but also leapfrog any dominant competitor. The store will operate on the Customer-to-Customer (C2C) platform and Business-to-Business (B2B) platform. The Overnight Star Service’s business platform will be modified through the introduction of services such as premium customer experience, compact support from the community, and low charges for a loyal customer. For instance, the Customer-to-Customer platform will ensure customer loyalty and market expansion.
In order to promote good public relations, the Overnight Star Service will contact management since it provides a decision support system to select the best market access on suitability, distribution structure, and integration of contact channels among the customers. The contact management system in the Overnight Star Service will take the form of Debit card services, online support, and a 24-hour call center to connect to the customers. This system will be constantly upgraded through value–added services. Keeping these channels restricted will help the Overnight Star Service to boost customer confidence in keeping their particulars safe.
We would also like to pursue a partnership with the Make a Wish foundation to offer the services of our most exceptional concierges to its recipients. #OSSfairygodmother will be the tag we will use to bring awareness to the cause, and we will be swooping in to provide total client transformations hours before their big “wish” day.
Personal selling
In order to sell the laundry services to clients, the Overnight Star Service will use the product approach, beneficial approach, and the referral approach through a team of salespersons. By combining these three approaches, the Overnight Star Service’s sales executives will use the product approach by displaying the services to potential clients after which they will employ the beneficial approach by describing the benefits such as time-saving, efficiency, and high-end approach. In order to restore the confidence of potential clients, the sales support team will use a referral approach by mentioning companies and individuals that have recently used the services of the Overnight Star Service business.
Product promotion is an element, which is very important in any hotel as it increases customer awareness of the products and persuades them to purchase the products. Since several products that hotels deliver comprise of services and the majority of the target customers need precise information concerning the products before they decide to purchase them. Promotion strategies are useful in reaching out to the target clients and marketers in hotels such as Crescent and Pioneer, which employ them in an attempt to increase customer loyalty and sales volume.
Reid and Bojanic (2009) explain that majority of the products that hotels offer comprise accommodation, food, and beverage (F/B), and entertainment services. As a result, potential consumers require extensive promotion strategies that do not only increase their level of awareness but also persuade them to purchase the products. Internet marketing, personal selling, advertising, and sales promotion are some of the promotion strategies used by hoteliers in product promotion.
Main Body
Communication channels in the hotel industry should be flexible and clear. The need to avoid bureaucracies and hierarchies in the hotel industry transpires because services, which compose the majority of products offered by hotels, require correct information as consumers take them a few minutes after their production. Imperatively, a breakdown in communication can result in dire consequences because the hotel industry requires communication among all the employees so that for them to execute their operations successfully. Managers and other top officials working in marketing firms should get out of their offices and interact with staff at the lower level of management (Perreault, Cannon, & McCarthy, 2010).
The act of interacting with the lower management staff facilitates easy communication within the hotel industry and increases solidarity and unity in the establishments. Through the increased solidarity and unity in establishments, the quality of products that the employees deliver improves. Crescent and Pioneer Hotels in the United States are some of the hotels that employ these communication channels to increase their sales volume.
Some of the major objectives that marketers strive to achieve in product promotion include increased customer awareness and high sales volume. According to Perreault, Cannon, and McCarthy (2010), product promotion aims to increase customer awareness concerning products in the market and achieve their loyalty. Promotion strategies such as advertising and internet marketing are instrumental in increasing the level of awareness among a wide spectrum of potential customers globally and persuading them to purchase the products.
When hotels like Crescent and Pioneer advertise their products using televisions, newspapers, and social media, consumers get to know about the products, and thus, purchase them. Essentially, the information relayed to the target consumers must be correct in all aspects so that the consumers can match their pre-consumption knowledge with post-consumption experiences. Through the delivery of correct information and good quality services, the sales volume increases as consumers, who become satisfied market the products through word of mouth marketing to their colleagues, friends, and relatives.
Conclusion
Crescent and Pioneer hotels are among the popular hotels in the United States. The promotion strategies employed by the hotels are similar and target a common set of consumers. Effective employment of promotion strategies is very important because it increases the sales volume of a marketing firm (Boone & Kurtz, 2011). The effectiveness of the strategies that Crescent and Pioneer hotels employ is evident in the high sales volume and the market share that they enjoy in the country and globally. Since the hotels have a rich history, their popularity in the United States demonstrates several similarities as opposed to contrasts. The contrasts are evident in the few strategies that varied hotels employ in an attempt to increase their potential customers.
List and describe components of the promotional mix. Give example for each.
The promotional mix is part of 4Ps’ marketing mix, and it can be divided into personal and non-personal communication with the customer (Kurtz and Boone 445). In this case, personal selling implies having direct contact with the consumer, and it is often used by real-estate agents and insurance providers (Kurtz and Boone 445). As for non-personal communication, it includes sales promotion, advertising, and PR (Kurtz and Boone 445). Advertising is utilized by well-known brands, and one of the examples is the advertising of shampoo on TV. In turn, sales promotion is often used by restaurants and retailers, and it implies ‘buy one get one free.’ Lastly, PR is presented by the company’s press releases about particular situations and recognition in social media.
What factors affect the choice of promotion mix elements?
A variety of factors tends to affect the promotion mix’s elements, including the available budget, organizational policies, type of the product and target market, and the actions of the competitors (Pride and Ferrell 375; Foxall 30). Some of the companies have a tendency to use all the promotional tools at the same time, but sometimes the factors mentioned above tend to limit their actions and choices. Firstly, the budget defines the available resources for the promotion activity, as different advertising instruments have various costs of the application. Furthermore, all other aspects mentioned above determine the company’s competitiveness and success by reviewing the strategies of the competitors and evaluating the main features of the target market.
Cite some advertising appeals that promoters consider. What must marketers consider when choosing these?
Advertising appeals are critical for the attraction of the customers to the brand, and, in this case, “humorous advertising appeals” change the reaction and encourage liking of the product (Schiffman, Hansen and Kanuk 304). In turn, other aspects include emotionality related to “sympathy, esteem, or recognition,” eco-friendliness and rationality associated with “safety, health, performance, earnings, and savings” (Plessis 135). These matters are the most common appeals, which are utilized among the promoters as the adverting instruments.
Nonetheless, the primary aspect that the promoters have to consider while using these appeals is to find the balance between emotionality and rationality. The matters mentioned above are tricky and require sufficient investigation before the application. Otherwise, despite the effectiveness of these tools, their usage might create misconceptions about the brand and offend the feelings of the consumers. Consequently, it can be viewed as a reason for the generation of negative perceptions about the company and its products.
What is the difference between a push and a pull strategy? Give example for each.
The push and pull strategies are important aspects of the market penetration. Push strategy implies forcing the product into the market by using retailers and changing the consumers’ preferences with the assistance of discounts (Doole and Lowe 318). For example, different restaurants use coupons and ‘two items for the price of one product/service’ to attract the customers to purchase their products. A similar approach is used by the producers of different items with the assistance of retailers. As for the pull strategy, it implies focusing on direct communication with the final consumer by evaluating his/her needs and introducing the product with the assistance of mass advertising (Doole and Lowe 318). As for the examples of the pull strategies, children watch the advertisements on the television and spot a delicious dessert. In this case, they ask their parents to purchase it, and this matter generates the demands in the stores.
Works Cited
Doole, Isobel, and Robin Lowe. International Marketing Strategy: Analysis Development and Implementation, London: South-Western Cengage Learning, 2008. Print.
Foxall, Gordon. The Routledge Companion to Consumer Behavior Analysis, London: Routledge, 2015. Print.
Kurtz, David, and Louis Boone. Contemporary Business, London: South-Western Cengage Learning, 2009. Print.
Plessis, Danie. Introduction to Public Relations and Advertising, Lansdowne: JUTA Education Ltd, 2000. Print.
Pride, William and Oliver Ferrell. Marketing Express, Boston: Houghton Mifflin Company, 2009. Print.
Schiffman, Leon, Harvard Hansen and Leslie Kanuk. Consumer Behavior: A European Outlook, Harlow: The Prentice Hall, 2008. Print.
When considering a business promotion plan, we intend to use mass promotion rather than distributed promotion. This choice is based on the fact that the demand for our product will increase highly during the months of July and December than during any other period. An apparent reason is people tint the windshields of their cars in summer to reduce the effects of hot weather and during Christmas holidays people buy our product as a gift for relatives or friends.
Therefore, our objectives are demand oriented as we want to increase our sales in the market during these seasons. Thus we plan to run a major ad campaign to reach all car manufactures not only in the US but also all around the world. The main focus of the message of our new company will be on the aspect of reducing the cost of having to tint windows frequently by using our high tech tinting method that comes with a five years warranty. Our strategy will be using an advertising promotional mix to stimulate the sales by 30% in the first six months. We also look forward to enhance the company image by generating selective demand by developing and maintaining the appeal of our product an outside advertising agency to provide a variety of advertising related services to client companies. The clients are the success key of our product and we intent to get this job executed by hiring an ad firm which with clients will facilitate the devising of their advertising plan by including themes, media choice, copywriting and more other tasks.
Our approach to budgeting will focus on evolving an affordable scheme and implementing it. Our company will prioritize expenditures and investments, and all funds remaining will be spent as an advertising budget. Thus, we expect to reduce cost for the company in the first year of selling the product. From a global perspective, our company will embrace a method to establish the advertisement budget while expanding the scope of the product globally. We will control budgeting decisions from our world headquarters rather than allowing each individual market to devise its own advertising strategy and budget.
We intend to make the campaign effective by developing themes that are consumer related. Thus the company emphasizes the theme of products or service help consumer. By evolving a thematic advertisement we tell the customers that our product will provide best privacy, style and security to them and their families. We expect this move to generate customer’s affinity towards our product and we can foresee the success of the product because we believe that consumer appeal describes a product in terms of consumer benefits rather than its features.
The three selected media of the product will be commercial television, magazines and the internet.
Determining the message content and devise ads appropriately will be very important to the firm because through proper communication we can create awareness of the product. As mentioned earlier in our SMP, the transition tinting windows will be cost effective for the consumers because of its durability and there will be no need to change it for 5 years or more. Then, we plan to outline a promotion schedule for all copy and artwork which will be based on the lead time needed for the chosen media. We will specify the location of each ad in a broadcast program or print medium because it is important to our firm, so we incur less cost for ads. Our product differs in message content. It depends on the frequency of presentation and the ad quality.
Because our firm is seasonal, we will be focusing on generating high sales in July and December more than the rest of the year. Timing the ad is also significant so that mass ads are used in peak times to foster short-run interest.
We will also stick to horizontal cooperative advertising and provide the organizational customers with the product. We sell the product to the organizational customers to receive our services through them. The transition tinting windows are purchased from our company and the dealers receive an advertising allowance for each transition tinting window sold and installed. The dealers are required by their contract with our company to use the advertising allowance to advertise our company’s products and services and to produce a documentation of the expenditures to our company for re-imbursement.
One of the important things to advertise any product is touching the people’s emotion through commercial advertisements. Most of the large companies all over the world are evoke the emotions, wishes, and preferences of consumers. In these days, advertisements turn out to be as a part of the culture of the global economy and civilization. Talking to the human emotion is more effective to attract the attention of masses and thereby gain wide publicity.
The aim of this report is to investigate and provide the Best Clothing Company with the most effective promotional strategy for introducing female leather jackets/coats, which is a new product, into the market.
Best Clothing is a small business located in Nottingham, United Kingdom, which mainly manufactures and sells women clothes. Best Clothing currently plans to introduce a leather jacket/coat for women into the highly competitive UK market.
The clothing market in the United Kingdom is perceived to be very competitive; with most of the clothing companies being large-scale, they can easily lower the prices of their clothes to take control of the market.
For Best Clothing to successfully launch the new product, it must employ an effective promotional strategy.
This report provides an exclusive description of the aspects Best Clothing needs to consider to launch the new clothing product into the market.
The report describes the project rationale; campaign audience profile; campaign objectives; campaign idea; creative execution, marketing, and communication strategies; and how the success of the campaign will be measured.
Project Selection and Rationale
The aim of the promotional strategy described in this report is to assist Best Clothing to successfully introduce the new leather jacket/coat for women into the market. There are a number of challenges that Best Clothing needs to consider before it plans to launch the new product.
For instance, the UK market for clothes currently experiences stiff competition, which could make it difficult for Best Clothing to get into the market with the new product, given that it is a small-scale business.
These are some of the problems and challenges that Best Clothing needs to put into consideration when designing the promotional strategy for the new product.
The most effective way by which Best Clothing can introduce the new product into the market is by creating consumer awareness about the product.
Such awareness can be created through the implementation of an integrated marketing communication strategy that uses the internet, support media, advertising, public relations, sales promotion, and direct marketing.
An integration communication strategy that uses all of these communication modes can enable the company to reach all the target consumers for this particular product (Smith & Zook, 2011).
Campaign Audience Profile
It is recommended that a company should determine its target market before the business embarks on the promotional strategy to reach the customers with its products. Targeting marketing is an equivalent of target promotion.
It is difficult to try to sell to the general market; such a move is considered a waste of time and resources. In such a scenario, it becomes difficult for the business to identify the potential customers for its products.
The closer a business is to its target market, the more it is able to reach relevant customers who are interested in its products (Smith & Zook, 2011).
In case of Best Clothing, the target audience is middle-aged working class women and college female students. The leather jackets are a bit expensive than the ordinary ones and as a result, the target market must comprise individuals with a good source of income or who like a good sense of fashion.
The new jackets are meant to make the target consumers feel good and stylish. Best Clothing, having identified the target consumers for the new product, is in a better position to design the most suitable promotional strategy for this group of clients.
Another important point as far as the target consumers are concerned is market segmentation. Market segmentation is concerned with characteristics such as demographics, geographic factors, psychographics, and needs and behaviours of the target consumers (Blakeman, 2007).
The target consumers consist of female individuals aged between 18 and 30 years. The target clients also include both working individuals and female college students who can afford to purchase the jackets.
Best Clothing plans to first introduce the new product to Nottingham markets and the neighbouring towns before going nationwide. This implies that the promotional activity for the new product is only going to cover Nottingham and its environs.
Audience Perception/Problem
The target audience has a positive perception of Best Clothing since the company has always provided them with the best clothes and shoes. The persons being targeted know the company as one of the best places they can shop for clothes.
The company is known for its attractive customer and after-sale services besides the quality wear it provides its customers with. It is speculated that the target audience will continue to have the same perception throughout the entire promotional period.
The target consumers are also known as a group of a high lifestyle and which likes to shop for new clothes and shoes. It is a natural behaviour in middle-aged women to want to identify with fashion and new attire since this makes them feel good.
The attitude of this audience is best identified with changes in fashion. The middle-aged working women and college female students prefer to spend a larger proportion of their income and resources on purchasing new clothes, especially those that they think are the most fashionable.
The three aspects, including consumers’ perception, lifestyle and attitude, are very important elements to be considered when designing an effective promotional strategy for the new leather jacket to be introduced into the market.
The marketing communications strategy and tools are going to be designed to reflect the three aspects (Blakeman, 2007).
For example, since it is known that the target audience cherishes fashion and likes to purchase clothes that make them feel good, the content of the communication tools will mainly be meant to explain to the target consumers how special the new jacket is and inform them the ways in which it will make them look good and special.
Campaign Objectives
This promotional campaign is intended to assist Best Clothing to achieve three main objectives: to build awareness for the new jacket, creating interest among the target consumers, and assisting the business to remain competitive in the market.
The promotional campaign is intended to assist Best Clothing to create awareness for the new jacket to be introduced into the market. The campaign is going to employ the available communication tools to expose the target customers to the new product.
The communication tools may also help the company to capture important information regarding its target customers as they get exposed to the product during the promotion period.
The main tools that can be used to capture customer information are sales promotion and advertising. The information can be used as an effective tool in following up the marketing efforts (Shimp, 2010).
The promotional campaign is also going to be used to create interest in the new product among the target consumers. The communication tools that are planned to be used in the promotion are effective and can enable the company to create a significant following for the new jacket.
Marketing scholars argue that an effective promotional campaign can help to increase consumer traffic to the company outlets. The interest can also be created by moving the target consumers to experience the new product (Shimp, 2010).
During the promotional period, the consumers may be allowed to try the new product at a lower cost to enable them to experience it before they make a decision to purchase it. This is intended to motivate a large number of the target consumers to try the product.
Lastly, the promotional campaign is meant to assist Best Clothing to remain competitive in the market by capturing a significant proportion of the clothing market in Nottingham and in the adjacent towns.
The promotional tools may also be used to induce the existing customers of Best Clothing to purchase the new product. Some of the sales promotion devices that can be used to achieve this objective include discount coupons and persistent persuasion.
It is predicted that with an intense promotional campaign, a significant number of the existing customers of Best Clothing will be easily convinced to try the new product, which will be introduced into the market (Shimp, 2010).
Campaign Idea and Slogan
The main idea that is going to be used to drive the planned promotional campaign is ‘It Is Different, It Is the Best.’ It is believed that the target audience comprises individuals who are more cautious about their looks than anything else.
For that reason, it is predicted that by assuring them that they will look smart, feel good and at the same time, protect their bodies from the chilly weather, they will be more willing to purchase the new jacket.
There is a high probability that the campaign idea is going to catch the attention of most of the target consumers.
The audience, which comprises mainly middle-aged working class women and college students, has a strong passion for clothes, especially those that are the most fashionable.
There is a high chance that the campaign idea is going to be an extremely convincing idea, which will make the target audience purchase and try the new product.
It is predicted that the idea is going to attract many individuals from the group being targeted to buy the new product as it can help them meet many objectives at the same time.
The campaign slogan that is going to be used in the promotional marketing is closed linked to the campaign idea. The slogan, as shown in the visual below, states that ‘Best Clothing, Keeps You Warm, Keeps You Smart, Makes You Feel Great.’
Figure 1: Campaign Slogan
It is believed that the slogan is going to assist the promotional marketers to attract the attention of the target audience. The slogan explains a lot about the new female jacket to be introduced to the market.
It is written in colourful letters and decorations to catch the attention of the target audience. It is believed that with this slogan, the promotional market of the new product is going to be very effective.
Marketing Communication Strategy
The main objective of marketing communication tools is to assist a company to create awareness of its background, its position in the market and the products and services it offers.
A communication strategy is said to be effective if it can address both the company’s immediate problem and its future needs (Chitty, 2011). There are a number of communication tools that Best Clothing can use to promote the new product.
Some of the tools include: the internet, sales promotions, and advertising (Pickton & Broderick, 2005). However, to obtain the best results, the company should adopt a combination of multiple communication tools.
Consequently, the proposed promotional campaign is going to apply a combination of the internet, advertising, sale promotion, direct marketing, public relations, and support media.
Internet
The internet is one of the most powerful tools that can be used by Best Clothing to inform the target audience about the new product that is about to be introduced into the market.
The main internet platforms that can be used in the Best Clothing promotional campaign are websites and social media. Best Clothing should design its website with information regarding the new jacket it plans to introduce into the market.
The information should include details such as the price and the benefits that customers will get from obtaining the new product. The pictures of the new jackets should also be included in the website to make the promotion appear realistic (Chitty, 2011).
Social media, the second internet platform, is also as effective as coming up with a good website; it can also enable Best Clothing to obtain good results and adequate customer feedback.
It is a fact that most of the target consumers are youths, who are the most frequent users of social networks, such as Facebook and Twitter. The main social network that is going to be used in this promotional campaign is Facebook as it cheap and easy to use (Clow & Baack, 2005).
The marketers are going to create a Facebook page for Best Clothing, where the new product will be promoted. The target customers will then be informed during sales promotions to visit the company’s Facebook page to obtain more details about the new product.
The internet is one of the communication tools that are going to be used a lot in this promotional campaign. The internet has many benefits when used as a promotional tool or as a marketing tool.
Firstly, the internet is cheap and easy to use; secondly, it reaches a large number of the target customers at the same time.
Thirdly, it is one of the most suitable tools for this case since most of the target consumers are frequent users of the internet, especially social media sites such as Facebook.
Lastly, the internet is extremely convenient as the target audience can access the information at any time they wish (Clow & Baack, 2005).
Advertising
Advertising, like the internet, is also an effective marketing tool. There are different types of advertising that a company can use depending on the stage or level in which the product is. The main advertising methods are pioneering, competitive, and comparative advertising.
In the case of Best Clothing, the type of the advertising that is going to be used is the pioneering type since the product is new and as a result, it needs to be launched first.
Pioneering advertising is intended to stimulate primary demand for the new jackets to be introduced into the market (Paley, 2006). The advertising should be designed in such a way that it provides the target consumers with in-depth information about the benefits of using the jacket.
As a result, the pioneering advertising method is going to help Best Clothing to create an interest in the new jacket and increase the awareness of the target audience with regard to its planned introduction.
Although advertising is going to help the campaign team to create awareness and increase the interest of the target audience in the new product, the advertising method will not be used as much as the other communication tools. Advertising has a number of shot-comings.
Firstly, some of the potential target customers are likely to be put off as the advertisement team attempts to increase their commission through hard core selling.
Secondly, the method is likely to leak secrets of Best Clothing to competing companies since there are no measures to guard the leakage of confidential information (Czinkota & Ronkainen, 2007).
Direct Marketing
Direct marketing allows Best Clothing to advertise and market directly to the target audience through both electronic and print media.
The direct marketing method is going to focus mainly on the target customers, statistical data obtained from marketing activities, and the reliability of the marketing team.
The information dissipated through this marketing tool is going to be based upon a principle of ‘call for action.’ The information will be delivered to the target audience directly (Czinkota & Ronkainen, 2007).
Figure 2: Direct Marketing Message
Direct marketing can provide the marketing team with an opportunity to reach individual members of the target customers as they seek to deliver a particular ‘call to action’ to them.
This marketing tool may enable the marketing agents of Best Clothing to develop a personal relationship with the target audience; consequently, the personal touch could make it easier for the agents to convince the audience to try using the new product (Kumar & Phommathed, 2005).
Direct marketing is going to be used more in the promotional campaign due to the numerous benefits it has. Direct marketing may enable company to cut down the cost of sending messages to the target consumers since the target market is situated close to the company.
Secondly, customer responses in direct marketing can be tracked and are measurable, which makes it easier for the marketing team to gauge the success of the promotional campaign (Doole & Lowe, 2008).
Sales Promotion
Sales promotion is a marketing communication tool that uses special short-term offers and techniques to persuade and convince individual members of a target audience to try a particular product.
During sales promotion, the marketers are supposed to offer valuable items to the customers who accept to purchase the product on promotional terms.
Some of the items that are offered mostly, depending on the nature of the product on promotion, include gifts, free samples, vouchers, coupons, discounted prices, and free trips (Jain, 2008).
The marketing team, in the case of Best Clothing, is going to offer gifts, such as perfumes, notebooks, vouchers, discounted prices, and mobile phones.
The team members, during their sales promotion trips, may tell the target audience that the first 20 customers to purchase product will be given specific gifts and vouchers. They can also tell them that the first 50 buyers will be given a discount that is worth 25% of the marked price of the product.
Another strategy that the team may use to persuade the target consumers to try purchasing the product is to tell them that they stand a chance to win beautiful mobile phones at the end of the promotional period.
Sales promotion is going to be used more since it is more likely to make the target consumers try buying the product. Even though it is quite expensive because of the resources required, sales promotion offers the most effective way of obtaining the consumers’ feedback in the shortest time.
The method also provides the marketing team with an opportunity to measure the success of the promotional campaign (Doole & Lowe, 2008).
Public Relations
Public relations, although a lowly perceived promotional tool, is also one of the most effective marketing tools that small companies can use to promote their products.
To apply this marketing tool in the promotional campaign for the new product, Best Clothing should first create a good working relationship with its customers, especially the ones who are expected to purchase the new product.
There are a number of strategies that Best Clothing can use to develop a good relationship with the target market. The best strategy at the moment is to attract the members of the target market by offering to them gifts, samples and vouchers (Jain, 2008).
After that, the customers can then be invited to purchase and try the new product. Although, this method appears to be extremely effective, it is not going to be used a lot since it is complicated and involving.
Support Media
Support media is equally important in the promotional campaign of the new jacket. Support media is effective and can be used by small companies that wish to enhance their link with their customers.
Best Clothing can use support media to reach many members of the target audience since most of them like to visit the media.
The marketing team of Best Clothing may be required to create pages for the company on Twitter, YouTube, Myspace, and Google + where details such as price and benefits of the product can be outlined. The support media platforms are going to be used extensively because of their benefits.
Firstly, support media is cheap as very few costs are incurred in using it. Secondly, the support media enables the company to reach a larger number of the target clients as most of them are known to use the platforms frequently (Egan, 2007).
Measuring Campaign Success
The success of this promotional campaign can be measured through a number of strategies.
Firstly, the success can be measured by visiting the company’s websites and its pages on the social media to check the number of internet users who normally access its sites.
An increase in the number of the target consumers accessing the sites and the pages will mean a success in the campaign.
Secondly, the success can also be measured through online surveys in which the respondents, who are mainly members of the target audience, may be asked if they were reached during the campaign period.
A significant number of positive responses will indicate a successful promotional campaign (Ferrell & Hartline, 2011).
Conclusion
This report provides an outline of how integrated marketing communication can be used by Best Clothing to promote one of its new products, a women jacket, to the target market. The target market in this case comprises middle-aged working class women and college female students.
Best Clothing is a small textile company with its headquarters based in Nottingham, in the United Kingdom.
Considering the nature of the company and the characteristics of the target group, the marketing communication tools proposed to be used in the promotional campaign are the internet, advertising, sales promotion, direct marketing, public relations, and support media.
The success of the campaign can be measured through visiting the company’s websites and pages on social media, or by conducting an online survey.
References
Blakeman, R. (2007). Integrated marketing communication: Creative strategy from idea to implementation. Lanham, MD: Rowman & Littlefield Publishers.
Chitty, W. (2011). Integrated marketing communication. South Melbourne, VC: Cengage Learning.
Clow, K. E., & Baack, D. (2005). Integrated advertising, promotion and marketing communications. Upper Saddle River, NJ: Pearson Prentice Hall.
Czinkota, M., & Ronkainen, I. (2007). International marketing. New York, NY: Thompson.
Doole, I., & Lowe, R. (2008). International marketing strategy: Analysis, development and implementation. London: Cengage Learning.
Egan, J. (2007). Marketing communications. London: Thomson.
Ferrell, O. C., & Hartline, M. D. (2011). Marketing strategy. Mason, OH: Cengage Learning.
Jain, S. (2008). Integrated marketing communication: Trends and innovations. New Delhi: Global India Publications.
Kumar, S., & Phommathed, P. (2005). New product development: An empirical study of the effects of innovation strategy, organization learning, and market conditions. New York, NY: Springer.
Paley, N. (2006). The managers’ guide to competitive marketing strategies. London: Thorogood.
Pickton, D., & Broderick, A. (2005). Integrated marketing communications. Upper Saddle River, NJ: Prentice Hall.
Shimp, T. A. (2010). Advertising, promotion, and other aspects of integrated marketing communications. Mason, OH: Cengage Learning.
Smith, P. R., & Zook, Z. (2011). Marketing communications: Integrating offline and online with social media. Philadelphia, PA: Kogan Page.
Business organisations must understand the behaviour of their consumers to sustain them as the most crucial tools for their success. Attempts to sustain customers involve putting in place appropriate marketing strategies that require a research on the reasons behind motivation of consumers to buy certain products and services.
Developing such capacity is pivotal in ensuring that marketing promotions are developed to target the right audience, which is capable of responding positively to a marketing campaign. The purchasing behaviour of consumers is often segregated in terms of various demographic factors such as age, gender, socio-economic status, and religion among others.
This implies that marketing strategies are developed consistently with the characteristics of the target audience so that resources including time and money are not channelled to marketing efforts for non-existing markets or a target audience, which is not likely to respond positively.
This dissertation paper proposes a research to establish the relationship between promotional strategies and customers’ behaviour within Taobao marketplace. Customers’ behaviour in the context of this dissertation is used to refer to the “study of individuals, groups, or organisations and the processes they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on consumers and society” (Blackwell & Engel 2006, p.11).
To study this aspect within the context of Taobao marketplace, the dissertation appreciates that studying customers’ behaviour is an immense challenge even in the well-defined markets. In fact, according to Armstrong (2001), even experts in the field of consumer behaviour find it incredibly difficult to study the aspect (p.252).
However, this challenge is addressed in the dissertation by attempting to study consumer behaviours among the Taobao marketplace in the context of how consumers respond to specific marketing strategies that are engineered for a specific target audience.
Any research must meet specific aims and objectives (Creaswell 2008). For this purpose, the structure of the dissertation paper begins with the discussion of the aims and objectives of the proposed research followed by research questions in the first section. The second section discusses various findings as documented in the past literature on customers’ behaviour and marketing strategies.
This helps to set a solid foundation to base the analysis of the results of the proposed research in the efforts to determine whether Taobao marketplace differs from other researched market segments. While conducting primary research, it is difficult to study a whole population because of funding constraints together with the difficulties experienced in the analysis of large amounts of data within minimal time constraints.
Consequently, in the last section of the dissertation paper, efforts are made to discuss the sampling technique that is deployed to define a sample that is representative of Taobao marketplace and the methodology of data collection and analysis.
Discussion of the sample is particularly important to help in the elimination of sampling biasness, which may impede the capacity of the selected sample to be representative of the characteristics of the consumer behaviours of the entire population of Taobao marketplace.
Aims and Objectives
Taobao marketplace operates in an online environment through interception of B2C (business-to-consumer) and C2C (consumer-to-consumer) strategies. This implies that the two main functions of business (buying and selling) are conducted via technological intervention of the internet.
Therefore, it is anticipated that the target population for Taobao marketplace is characterised by different buying behaviours in comparison with the physical marketplace that embraces the face-to-face interaction strategy with organisational selling agents and consumers.
Based on this theoretical hypothesis, the proposed research in this dissertation paper is aimed at reviewing the literature in the field of online consumer behaviour in the effort to set a parameter for comparing and contrasting the findings of the main primary research. In this endeavour, secondary data, as documented in books, journals, magazines, and reliable web resources is pivotal.
The objective is to identify the possible effective promotional strategies that would help to yield the success of an organisation that conducts business in an online environment such as Taobao marketplace. Realisation of this objective is crucial in helping to attain the overall objective of the research: to explore the relationship between online promotional strategy and consumer behaviour.
Another central objective is to develop a model for explaining online consumer behaviour in the context of the Chinese market. This aim is realised through examining the impact of online consumer behaviour in the context of China and its impacts on Taobao marketplace online promotion strategy.
Research Questions
Two main research questions will be considered in the main research. These are:
How do Taobao customers respond to different promotional strategies?
Are there ways for ensuring that customers develop similar attitudes together with motivation to purchase in an online environment that is realised through B2C and C2C technologies?
Overview of Taobao
Taobao depends on e-commerce to execute its business functions. E-commerce refers to a commercial activity that is executed electronically. It is enhanced by the internet, which boosts the connectivity between sellers and consumers across the globe (Xiaoni & Prybutok 2004). After the industrial revolution of early 20th century, the dawn of e-commerce comprised one the mega episodes that have made economic history of people to revolution.
The internet and e-commerce have broken down the geographical demarcations so that businesses require only a single physical location from where all customer procurement and chain supply tasks are executed for the business to operate effectively. Worldwide electronic commerce market is developing at an alarming rate. Lorenzo (2010) estimates this growth as worth €400 billion.
Taobao is the largest network of retail and business units. The networks are committed in building a global preferred network of retail and business area. Alibaba Group founded it in 2003. Taobao operates two main e-commerce platforms. These are business across C2C (consumer-to-consumer) and B2C (businesses-to-consumer). During the first quarter of 2008, more than 6200 people joined Taobao. A large number of them covers mostly online shopping population (Taobao Marketplace 2013).
During the first quarter of 2008, Taobao’s transactions were in excess of 18.8 billion with an annual turnover in excess of 433 million by 2007. According to a 2007 third-party authority research, Taobao occupies more than 70% of China’s online shopping market share (Taobao Marketplace 2013). For C2C market, Taobao occupies more than 80% in terms of market share.
To date, Taobao has emerged a first choice for conducting online business transactions of a majority of internet users and online entrepreneurs together with business society. In October 2005, Taobao announced to create 1 million jobs within a time span of five years.
This was one of the promotional techniques deployed by Taobao to prove that, apart from helping consumers to gain the utility of products and services that are sold through retail and business networks, it also has a responsibility of meeting the needs of the communities, which it serves in terms of provision of employment. The main question is whether such a promotional technique translates to increased sales for an organisation conducting business in an online environment.
Literature Review
Preference of an organisation’s products and services in comparison to another organisation’s merchandise implies that there is a psychological driving force, which influences the behaviour of consumers. Organisations influence consumers to purchase their products and services through promotion strategies (Maktoba, Ian & Sonny 2011: Paco 2008). This suggests there is a relationship between consumer behaviour and promotional or marketing strategies.
According to Solomon (2004), customers’ behaviour is shaped by interactions of a customer with certain environmental and marketing stimuli. Marketing stimuli comprise price, promotion, place, and product. In an online marketing environment, place is not an important marketing stimulus since a business organisation requires only one physical location to execute all business functions.
Environmental stimuli consist of aspects that shape the buying patterns of consumers such as demographic, cultural, technological, and economic components (Kardes et al. 2011). For buyers to make a purchase, decision processes are important. These processes include “problem recognition, information search, alternative evaluation, purchase decision, and post purchase behaviour” (Solomon 2004, p.67).
Decision processes are shaped by myriads of buyer traits among them being attitudes, perceptions, lifestyle, motivations, products knowledge, and personality. While studying consumer behaviour, Foxall (2005) and Kardes et al. (2011) insist that it is crucial for an organisation to develop an adequate knowledge base on factors that influence products choice, dealer selection, and amount of purchase, brand choice decisions, and purchase timing of customers.
This model suggests that consumers make certain buying decisions through prior possession of information on a given problem, which is solved by a given product or service on offer. The work of Solomon claims, “In reality, many decisions are not made in the awareness of a determined problem by the consumer” (2004, p.81). Even though this may be true, it is crucial to note that a product or a service must satisfy a given need that prompts a customer to seek a service or a product in the marketplace.
The internet has provided an effective and easy way of accessing information concerning products and services. Hence, it is one the most effective promotional tools, which can help to create various stimuli, which might motivate consumers to purchase various goods and services.
Foxall (2005) argues that, apart from considering the utility of products or a service, consumers also shape their buying behaviours depending on the easiness through which they have information about products and services (p.45). Khosla (2010) further develops this argument by claiming that a consumer executes both internal and external searches to gain the full information on products that would satisfy his or her needs in the most profound manner.
Sources of external information comprise public advertisements, commercial advertisements, and personal information based on products and services experience (Khosla 2010). Currently, people prefer gaining information without hassles. This makes search engines instrumental in effecting the promotion of an organisation seeking to sell to an emerging breed of consumers.
Unfortunately, such consumers require to be convinced that the products they buy will satisfy their needs. Recognition of this essential need has prompted many online marketing organisations to deploy social media as a platform for enhancing a two-way communication between consumers and sellers.
The need to keep the consumer informed coupled with the provision of the means through which they can post their concerns or areas where they need clarifications to be made has led to the emergence of new technological methods of conducting businesses such as the B2C and C2C criteria (Kalakota & Whinston 2008).
While this technologies can run on a standard personal computer, the increasing number of people with mobile devices, which support platforms for financial transactions has made it possible for the two technologies to adopt mobile devices. Thus, technology is an essential factor that shapes the buying behaviour of consumers in the 21st century market place. Taobao has recognised this factor and developed technological selling platforms that are guided by the development of B2C and C2C.
The question the organisation needs to address is how effective the online business model is in enhancing competitive advantage of Taobao in terms of shaping consumers’ behaviour so that they can respond positively to its promotional strategies.
Many organisations have recognised the benefits that may result from full exploitation of the new wave of the mobile internet. This wave is making organisations benefit immensely in hiking their value-added services together with enhancing their competitive advantage. From the contexts of the customers that are targeted by these organisations including Taobao, mobile applications provide easy means of facilitating customers to access their information.
This information is available right in their pockets and stored within the applications that run from their smart phones. With regard to Zhang and Adipat (2005), “mobile applications are everywhere in categories of games, social networking, productivity tools, infotainment, data management, and utilities” (p.293).
This availability of mobile applications in a variety of forms makes consumers receive mobile supported contents in a superior way compared to classical channels of mobiles among them being the short message services and mobile browsing.
Consistent with this line of argument, consumers may have three significant benefits accruing from having the ability to gain access to their data via mobile applications. These are volume, speed, and ease of accessibility to advertisements. This advantage forms the basis of success of mobile devices in helping to build good relationships with customers.
The modern-day consumers live in a world in which they anticipate getting anything at the time they want it. Therefore, the time within which consumers are able to access whatever information they want is an immense concern that organisations need to address if at all they want to capture this population that is incredibly time cautious.
Indeed, while attempting to access one’s data through desktops and notebook computers, the patience of consumers is metered since they have to wait until booting is complete followed by the loading of internet via 3G or 4G network and then starting the search process to receive their data, which is essential in helping to make buying decisions. Taobao deploys mobile applications to enhance successful execution of these purchasing processes because they save time.
When the application loads on the mobile device, the consumer will have access to all information he or she needs within minimal time. Surprisingly, in case updating of some information is required, it is accomplished in the applications’ background. Consequently, consumers are given an opportunity to access other data while in the mean time waiting the application to finish loading.
In appreciation of this benefit, Myers et al. Laments, “mobile apps are becoming so functional and popular among consumer especially by considering that nearly half of all corporate-issued devices will be mobile” (2006, p.39). To the consumers, this means that their data will be available right in their pockets.
In a nation that is served by the 3G network, consumers have limitations for storing large amounts of their information in the virtual memories of the internet. However, mobile application has the capacity to keep magnificent volumes of data including catalogues and videos. They then use this information to influence other consumers.
This implies that the deployment of mobile applications to execute marketing strategies makes it possible for an organisation to use loyal customers to market or promote their products in the absence of inputs of organisations’ resources (Xiaoni & Prybutok 2004). An additional benefit is also realised in that the data is kept within the mobile application, thus prompting improvement of experiences of users who are largely the consumers.
Although the era of billboards advertising is not yet over, mobile advertising is rapidly catching up. Interestingly, this trend is not anticipated to stop any time soon. Opposed to the localised placement of billboards, mobile advertisement enables consumers to have a constant accessibility to advertisement any time they wish. Therefore, for Taobao, there is no need for timing when to place advertisements.
In any marketplace, many scholars have found that understanding consumer behaviour plays a variety of roles in influencing the promotional techniques that will best help to win consumers.
For instance, Ward and Lee (2006) argue that understanding customers’ behaviour may reveal that consumers are influenced to buy through logical arguments while they are persuaded to make purchases in some situations through emotional messages or through the creation of promotional strategies, which evoke symbolic appeals (p.8). Studies in consumer behaviour contend that behaviours among people arise at an individual or group level and hence the logic behind market segmentation.
Consumer behaviour is studied for a variety of reasons. The single most important reason is to help in developing a winning marketing or promotional strategy for an organisation’s products and services (Carmody 2004). This underlines the significance of the need to study whether there is any relationship between promotional techniques and consumer behaviour in an online marketplace.
Existence of a positive relationship implies that online selling organisations such as Taobao should engineer applications, which support promotions via mobile devices. Understanding customers’ behaviour means that promotions can be timed precisely (Carmody 2004). For instance, studies in customers’ purchasing patterns may reveal that most consumers buy certain products such as electronic items at the end of the month when they receive their salaries.
Consequently, while using social media, advertisements for such products are made aggressively a few days before the end of the month. Understanding customers’ behaviour also gives an indication to a seller on how to prepare financially to successfully place new products and product lines. In this context, Armstrong (2001) argues that few customers mostly embrace new products upon their first placement in the marketplace.
For Taobao, this means that adequate funds are required while attempting to place new products online to ensure that the organisation remains afloat before market picks when customers share their experiences about the products or when the organisation manages to convince potential customers about the usefulness of a product.
Online consumers have distinctive behaviours compared to consumers who buy products from physical locations of an organisation. Abhamid, McGrath, and Khatibi (2007) support this assertion by claiming, “Online consumers are demanding different relationships from service providers (p.543). They have more focus on service quality and effectiveness in exchange of prices (Anderson & Srinivasan 2003).
They also conduct an evaluation of quality experiences since they consider high-quality services that are rendered by a given organisation to comprise one of the most important service attributes, which are essential in helping to shape their buying behaviour (Abhamid & McGrath 2005).
This means that, in the context of determining the relationship between customers’ behaviours and promotional strategies in Taobao marketplace, findings on the studies that determine the features of a service, which most of the customers shopping in an online environment look for are important once incorporated in the analysis of the result findings.
With the rapid growth in the number of people who are engaged in social media, many people acquire information about a service or a product experience from their friends or followers. Organisations that sell online should then consider perusing postings made by their customers to determine whether their service delivery methods satisfy the preconceived needs of customers when they buy a product or a service from an organisation (Abhamid, McGrath & Khatibi 2007).
From these theoretical arguments, in the effort to create awareness of the existence of an organisation, social media is incredibly helpful. Such a strategy for building positive brand image is opposed to traditional approaches for brand communication in which organisations mainly focused on “controlling what was said about their products and brands by dominating communication channels with carefully planned messaging” (Anbu & Mavuso 2012, p.319).
However, in the modern business environment, control of messages is immensely difficult since the ability of customers to access information through online interactions has become incredibly sophisticated.
The significance of effecting communication strategies for marketing the service brand through social media is ardent bearing in mind, “today, customer communication takes the form of bilateral dialogue” (Rust, Zeithaml & Lemon 2004, p.117). This often entails online communication through B2C and C2C as evidenced by the case of Taobao.
Sample Selection
Empirical studies begin with the selection of an appropriate sample size depending on the desired statistical confidence levels. According to Scott, “sample size is an important feature of any empirical study in which the goal is to make inferences about a population from a sample” (2011, p.87). Therefore, a sample that will yield a powerful tool for making statistical inferences revealing the consumption behaviour of the entire population is necessary.
In the determination of this sample size, some parameters must be known. They include “confidence interval (margin of error), size of the population, confidence level, and standard deviation” (Saunders, Thornhill & Lewis 2009). Population size refers to the number of people who fit within the demographics of an empirical study.
In the context of this research, the total number of people forming the Taobao market place is necessary. However, although it is not known, it does not make the research impossible to execute since it is common for the population to be unknown in empirical studies (Saunders, Thornhill & Lewis 2009). The only important thing here is to determine the most appropriate demographic group to study.
According to the data released by a Taobao report, low-income consumption levels are at “3 percent, 17 percent for lower middle income consumption, 61 percent for middle, and 15 percent for higher middle income consumption” (Taobao Marketplace Index, 2013). High-income consumption level accounts for only 3 percent. According to the same report, white-collar consumer accounts for 41 percent while students account for only 13 percent.
In the context of age demographics, 33 percent of the total buyers are in the age gap of between 0-25 years, 35 percent are in the age gap of 25-30 while those in the age gap of 30 to 35 account for 14 percent (Taobao Marketplace Index, 2013). This means that 79 percent of Taobao’s customers are in the age group of between 0 and 35.
This group is a sufficient target group to focus on especially by noting that such an age group has probabilities of positively embracing e-commerce as an acceptable mode of business transactions. Therefore, the people targeted by the primary research are from the middle class society, and those who have employment (aged between10-35 years).
Having established the target audience of the research, the other mega challenge is to establish the confidence interval. Samples are not perfect (Bryman 2008). Hence, setting the limits of the error that is permissible in the research is necessary.
“The confidence level determines how much higher or lower than the population researchers are willing to let their sample mean to fall” (Scott 2011, p.89). Although a researcher has the freedom of determining the range within which a sample mean should fall in, a standard value of +/-5 is chosen for this research.
For statistical analysis, it is necessary to choose an appropriate confidence level. For an empirical research, the mostly used confidence levels are 90 percent, 95 percent, and 99 percent (Smithson 2003, p.67). In the proposed research, 95 percent confidence interval will be deployed. Standard deviation is yet another important parameter in the determination of sample size for utilisation in a primary research.
It refers to the degree in which the interviewees’ responses should vary. 0.5 is utilised in this research since “it is the most forgiving number that ensures that a sample is large enough” (Scott 2011, p.89). Choosing a large sample is important since a larger sample attracts representativeness of the population characteristics.
A given confidence level corresponds to a given Z score value. For 95 percent confidence, Z score value is 1.96. With this value, it becomes possible to calculate the required sample size using the formula-
(Scott 2011). When the chosen values are substituted in this equation, the value of sample size is 385.
Methodology
Conducting a business in online environments implies that a physical contact between customers and sellers rarely takes place. This means that holding face-to-face interviews with customers of Taobao in the effort to garner information on their motivation for buying is incredibly difficult and an unreliable method of data collection. Indeed, garnering data for this research requires deployment of more than one technique.
To enhance transaction through the B2C and C2C criteria, the seller and buyer share contact information including telephone numbers and e-mail contacts. The researcher proposes to utilise contact information of customers of Taobao contained in the organisation’s database to e-mail questionnaires, conduct telephone interviews, and where possible to request some of the customers who are successfully incorporated in the sample for a face-to face-interview.
The researcher also determines various proportional strategies deployed by Taobao and the impacts of such strategies on the selling capability of the company. Through the questionnaires and the telephone interview, the audience provides information on how they knew about Taobao and their perception about online payments and procurement. This information helps in the determination of correlation and relationship between marketing strategy and consumer behaviours within Taobao marketplace.
Conclusion
Different customers require different promotional strategies to place products and services of an organisation to them. For online shoppers, it is hypothesised by the dissertation that such shoppers have a particular buying behaviour, which requires specific promotional strategies. The hypothesis suggests that a relationship exists between customers’ behaviour and promotional strategy.
While this may be true for organisations selling through physical premises, minimal research has been conducted to determine this relationship for online marketplace especially in China. In the effort to seal this gap, the dissertation proposes a research to determine a relationship between customers’ behaviour and promotional strategies used by Taobao.
For Taobao, majority of the online shoppers are middle class and in the age group of between 0 and 35 years. Consequently, the research will be based on this target group by use of e-mailed questionnaires, face-to-face interviews and telephone interviews as the main primary methods of data collections for a sample of 385 Taobao online shoppers. Analysis will then be conducted to determine the correlation and hence the relationship between the two aspects.
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