POM/U4 Topic 6 Optimum Promotion Mix
Promotion Mix is the combination of various tools employed by the company in the advancement of the product in the market, raising its market share and also with other objectives like educating customer about the availability of superior product in the market compared to existing known brands.
Company needs to use various tools of promotion like advertising, sales promotion, personal selling, customer relationship. But the real question what should be its proportion in the total promotional program. Depending upon the market conditions, the feedback received by market analysis, the importance, utility and applicability of each tool would be decided by the management of the company.
The term Optimum Promotion Mix is indicating the level of results compared to the expectations from the adoption of particular promotion mix. It implies maximum return for minimum inputs in the form of expenditure on various promotional tools employed by the company. Naturally while thinking of optimum promotion mix the allocation of financial budget and its bifurcation or division over the use of various tools of promotion assumes importance. Based on practical requirement of the market the resources would be allocated for various promotion tools.
The optimum results expected may be in the form of attainment of particular sales figure within a stipulated time period. It can also be widening the market range and share of the particular product in certain market. It also implies conveying the message or reaching to the maximum number of customers – so as to pursue them in their buying decision.
(i) Product Nature
Depending upon the type of product the use of tool changes. For Highly technical products or industrial products- more importance for personal selling would be appropriate. While in respect goods meant for daily consumption wide publicity would be more important.
(ii) Nature of Market
It is another important aspect deciding the tool and its use. For purely local or rural market the advertisement and display within local market or even during weekly market fairs in villages would be sufficient. While for National Market spreading of message addressed to all segments of the market spread over the country through national medium would become necessity.
(iii) Nature of Customers
Depending upon the nature of customers based on their educational and financial background, their buying habits, their preferences for branded and quality products etc. ensuring the presence of the products in such places which are visited by them quite frequently needs becomes vital. For such customers opening a posh sales center in the largest market would be appropriate. Or using the Major departmental stores within the chain of distribution would be more useful.
(iv) Budget Allocation
Provision of Total Sales Budget and the period involved also attains more importance. Based on the previous experiences about the suitability, utility and guarantee of results actual allocation of funds for various tools may be done. It is not enough just to allocate the funds but its utility needs to be judged at various intervals. If payment for particular promotion tool is not generating expected result it would be in the interest of the business to stop further use of that method. Reallocation of funds based on real results becomes prime requirement in such situation. So Budget allocation must be flexible to accommodate, alter the division over various tools of promotion.