4. Sales Promotion

Sales Promotion refers to any activities such as advertising, sales person, sales promotion, and public relation that aim to motivate buyer to buy the product or service.

Marketing activities and advertising could motivate and make the consumer interested in the product. This can be done from using certain channels such as exhibiting in a trade fair, giving a free gift, discounting, conducting sweepstake, sponsoring a competition, providing coupon, stamp, or using a salesman. A salesperson is one of the important channels in selling product since he can establish a direct interaction with the potential customer, is able to adjust the selling price according to the customers’ need, and more importantly can informally and flexibly persuade and provide information to the customer.

Consumers’ behavior analysis means to look for causes that influence the consumer purchasing decision. Such analysis will let the marketer know the true characteristics of the market and allow the marketing administrator to develop and adjust the marketing plan according to the reality.

The marketer should apply an analysis of consumers’ behavior by considering:

1) Who is the consumer by using market segmentation based on geography, demography, psychology, and behavioral science.

2) Market need: the entrepreneur will have to study what is the customer need in buying the product; for examples, some might use a luxurious car because they need to be proud, some might select an expensive restaurant because they not only need good quality food but also good services and conveniences. The marketer will have to analyze what is needed by the customer to arrange the element of product according to the need.

3) Purchasing decision: the entrepreneur must learn the purchasing decision process of the consumer which consists of:

1) Need recognition: at this stage the consumers’ need is triggered by stimuli such as hunger, desire, survival need, recognition, and imitation.

2) Information search: when a need is triggered, the consumer will look for information related to the particular product and service from friends, family, neighbors, advertising, public media, and those who have experienced in using the product / service.

3) Evaluation of alternative: after receiving all the relevant information, the consumer will evaluate each option to make a purchasing decision. Most consumers utilize his past experiences, attitudes toward merchandize or brand, and opinions from friends to make a selection.

4) Purchase decision: the consumer then chooses the brand that he likes most after an evaluation process, so the marketer has to put effort in feeding information to the consumer and make a product recommendation.

5) Post purchasing: this happens after the customer has used the product. If the product is able to meet the customer’s expectation, it will create a good image for the brand or vice versa.

The whole process starts from the need of product to the post purchasing attitude. Such process will take a lot of time and effort or not will depend on types of product, individuals who purchase it, decision makers, promotions, etc. The time used in each process will not be equal since the consumer may change his mind, there might be an obstacle to prevent the purchase, or some might decide to prolong the purchase.

4) Why the consumer purchases the product: this is a consideration of purchasing objectives or purposes.

5) When the consumer purchases the product: a marketer must know when his consumer buys the product and this will vary according to the characteristics of product, in order to suitably plan the marketing strategy based on the purchasing behavior. In doing so, one might consider the following factors.

1) Purchase of product used in daily life. This includes inexpensive products that must be bought regularly and consumers are familiar with its type, characteristic, appearance, and brand. They will buy the product when it is used up, nearly used up, or some might want to store it for later uses.

2) Sometimes consumers may not be familiar with the product brand, although they know the product well; for example, eating out, upcountry traveling, and selecting hotels. Consumers will have an opportunity to buy such services at the weekend or on annual vacation.

3) An analysis of when consumers will buy the product will let the marketer determines promotional strategies that match the time of purchase; for examples, providing discounts, giving a free embodying service, or providing a discount for socks if shoes are purchased in the period prior to semester-open.

6) Where will the customer purchases product: this is related to a question of distribution channels that are appropriate to products. One might consider where will consumers buy the products; for examples, from large department stores, or grocery shops nearby.

7) Who involves in making the purchasing decision: to see the roles of each group that influences or takes part in decision making.

In summary, the entrepreneur and marketer will have to study factors affecting consumers to identify their needs and to suitably arrange the marketing mix that includes product, price, promotion, and distribution.

Marketing planning refers to a determination of target customers, a creation of credibility for the business and its investors, and methods to attract new customers and retain those old ones.

Marketing strategy planning involves a determination of objectives and a selection of market target. It is also related to a development of long-term planning to make the business survive and sustainably gains profits for a long time.

The benefits of marketing information include of: -

1. It provides an understanding of problems

2. It helps us to speculate the need

3. It helps us to spend budget reasonably

4. It clarifies how to manage and set target

5. It helps seeing business problems

6. Its increase productivity

7. It foresees business situation

8. It provides information of market, customer, and current situation of the industry, as well as its trend

9. It provides information on competitors’ products, promotions, and their business expansions

10. It provides information on results and problems from sales or sales report

11. It creates chances to enter new market

12. It provides information on the changes of competitors

13. It provides information on customer’s needs and attitudes, and the effectiveness of existing strategies

5. Arrangement of Customer Database

1. The meaning of arrangement of customer database: information will help in a determination of marketing gap, strategies of marketing, advertising, media, as well as helping in any analysis. It is an important factor in direct marketing since the business will not be able to communicate to or understand the target group of customer without such database.

2. Objective in arrangement of customer database

1. To realize the importance of listing a customer name list

2. To understand the basic principle in making a customer’s name list

3. To understand the type of database

4. To know the component of customers’ data base

The customer’s name list can be created by:

(1) Filling in the customer blank sheet: firstly, one will have to prepare a blank sheet to collect customer’s information while selling the product or being contacted by customers. It should indicate reason to the customer such as to inform product news, to give promotion, to provide an after sales service, or to create a member card for the customer. This will make the customer more willing to give his information. In addition, one might have the customer who is interested in the product fill in his information in the form provided in various channels.

(2) Directly asking information from the customer himself. The sales person or telephone operator might assist the customer by prior informing and asking for such information from the customer himself.

(3) Collecting information from attendances in trading expo or exhibitions. Those who attend such trading expo or exhibition are those who tend to be interested in the product. To collect information from these attendances, one might consider to set a special campaign telling that there will be a lucky draw or certain prizes for those who fill in the form. This will make audiences willing to give their information.

(4) Collecting data from after sales. Certain types of product have its own after sales service and generally have a product warranty which contains customer details, so this is considered to be a good database containing more details of customer than any other things aforementioned. The necessary details that should be obtained from customers will be identified in the following topics.

(5) Sending a gift card in the festive season. Some might order a product as a gift for other people and let the producer deliver the product. Therefore, this is a good chance to ask for receiver’s details and store them in the database for a later use.

(6) Sending them a gift voucher or questionnaire. When the customer comes and uses the voucher, it is recommended to record his or her name and address.

(7) Collecting data when the customer uses his credit card.

(8) Collecting data from customer’s recommendation. One might ask regular customers to recommend their friends that might be interested in buying the product or might motivate the customer to recommend their friends; for example, giving a special gift for customer who recommends at least 4 friends.

Benefit in making a customer database

(1) Gain the information of high profit groups of customer

(2) Able to provide other services for existing group of customer

(3) Able to select the target customer more precisely

(4) Able to determine how to turn the expected customer into real customer

(5) Gain information that can be used to arrange customer’s activities

(6) Able to develop suitable promotional campaigns

(7) Able to create new market opportunities

(8) Able to develop strategies attracting this group of customer

(9) Able to evaluate advertising and promotion effectiveness

(10) Able to reduce wastes and improve productivity

(11) Able to evaluate promotional results

(12) Able to reduce cost and increase sales volume

6. Distribution of Product

Marketer nowadays place an importance on product distribution no less than other marketing factors. If the product is needed by the market but its distribution is poor; for instances, failed delivering or delay, this will cause a great loss due to the decrease in sales and number of customer.

1) The main objective of product distribution is to deliver the right product to the right place at the right time with the least expenses.

2) The role and importance of product distribution: it is the link between the producer and the consumer; in the other words, to sell the product to the consumer as soon as it is required. Therefore, it is necessary for the entrepreneur to carefully take into consideration the following factors when delivering the product.

(1) The right product is delivered

(2) It is delivered in the right time

(3) The quantity of product delivered is correct

(4) It is delivered into the right place

(5) It is delivered in the desirable pattern / form

Product distribution is a delivery of product to the consumer or customer. The process is related to the work in other functions; starting from the sales forecast that involves production and selling plans. Next it involves product distribution process which is related to an arrangement of transportation system, procurement channel, sales channel, and inventory system in order to gain procurement effectiveness in purchasing raw materials for production and to gain marketing effectiveness and be able to sell products and services to customer.

3) The concept of marketing can be classified into 2 categories which are:

(1) Production Concept which emphasizes on an arrangement of resources to produce the product and sell it to the customer.

(2) Marketing Concept that mainly focuses on the customer’s need and try to satisfy it.

It is the duty of the entrepreneur and the marketer to achieve any target set. A guideline in doing so is outlined below.

(1) Conduct an analysis of environment and a market research by checking the consequence of economic condition and competition toward the marketing issues.

(2) Conduct a consumer analysis by evaluating the consumer’s purchasing decision process.

(3) Conduct production and service planning by developing the product, brand, package, as well as calling off certain products.

(4) Conduct a price planning by determining price ranges, pricing technique, and deciding whether to use offensive or defensive pricing strategies.

(5) Arrange a distribution plan by determining the distribution channel, means of transportation, preservation method, product screening method, and whether to use retailing or wholesaling.

(6) Arrange a sales promotion plan by advertising, using sales person, and public relation.

(7) Consider social responsibilities in terms of safety, ethics, and focus on product and service values.

(8) Manage marketing by developing the marketing plan and evaluating the risk and benefit of marketing decision.