10 Minute Guide

CIM 14280 | DS | May 2009

How to achieve an effective

promotional mix

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10 Minute Guide

PromotionalMix

What it isThe ‘promotional mix’ is a term used todescribe the set of tools that a businesscan use to communicate effectively thebenefits of its products or services to itscustomers.

The promotional mix includes the followingtools –• advertising• public relations• sales promotion• direct marketing• personal selling

The promotional mix is part of the widermarketing mix. To find out about themarketing mix see the 10-minute MarketingMix.

Why it is importantIf customers don’t know what products andservices you provide, then your businesswill not survive in today’s competitivemarketplace. Effective communication withyour customers is vital to ensure that yourbusiness generates sales and profits.

By taking the time to develop andimplement an appropriate promotional mix,you will stimulate your target audience tobuy your products or services – andmanage this within a budget you can afford.

What you should doA successful promotional mix uses abalance of its five tools in a planned andstructured way – a single tool rarely workswell in isolation.

The challenge is to select the right mix ofpromotional activities to suit your particularbusiness at a particular time – and to thenuse it correctly to achieve a result. Thecombination of tools you use will dependon the target audience, the message youwish to communicate and the budget youmake available. There would be little pointin advertising new gas boilers in a fashionmagazine – much more appropriate toadvertise in a trade magazine for buildersand gas fitters.

Here is a 10-step checklist for developingand managing your promotional mix.1. Decide how the products and services

you provide can be ‘packaged’together. The image of your business isformed by the way you promote theelements of the marketing mix – yourproducts, prices and the places throughwhich you sell. It is often helpful to thinkabout promoting the business asopposed to a single product or service.If you need to think more about themarketing mix before going any further,take a look at the 10-minute MarketingMix briefing.

2. Develop a profile of the target audiencefor the message you will communicate.Who is the target audience? This goesbeyond a simple customer list. Is itconsumers, businesses or members ofthe channel (such as distributors) youare using to get your product to the endcustomer? Is it the wider stakeholderaudience?

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3. Decide on the message to use. Are youtrying to differentiate, remind, inform orpersuade? Set an objective for whatshould be achieved. Be clear about thebenefits that you want to promote.

4. Decide what image of theproduct/service/business you want youraudience to retain.

5. Decide on a budget. This is often howmuch you can afford given projectedsales for the product or service.

6. Decide how the message should bedelivered. To help you to decide whataspects of the promotional mix to use,think about taking your customers on ajourney that starts by creatingawareness about your business,through obtaining information about theproducts and services you provide, andends by generating a sale. Eachcomponent of the mix will achieve adifferent result, so your choice must bebased on real objectives for yourbusiness. What promotional toolsshould be used? When shouldcommunications happen? How often?Is the message consistent?

7. Decide what actions you want youraudience to take as a result of receivingyour communication. It isn’t always‘place an order’.

8. Put in place a means of measuring andcontrolling the plan once it isdeveloped. Who will be responsible fordealing with the agency or media? Whowill be responsible for checking thatpromotional activity happens asplanned?

9. Undertake your promotional plan. Beconsistent in what you say and howyou say it.

10. Measure what you have achievedagainst the original objectives that youset.

What you need to knowTo use the promotional mix effectively, youneed to understand a little bit more abouteach of the five tools and how you coulduse them to achieve your objectives.

Advertising – There are three main reasonsfor advertising –• to provide your target audience with

information (creating awareness)• to persuade them to buy from you (by

promoting product and companybenefits)

• to reinforce your existence (byconsistently repeating key messages)

Research shows that people need to seean advertisement at least seven timesbefore it starts to mean anything to them.So, to be effective, advertising needs to beconducted regularly in a consistent and‘recognisable’ manner.

It can therefore be quite costly. Typicaladvertising media include Yellow Pages,local newspapers, radio, trade journals,exhibitions and websites. It is also difficultto assess how much business is achievedthrough ‘paid-for’ advertising unless youinclude some form of monitoring scheme(such as a discount voucher) within theadvertisement.

Public relations – Publicity is something that‘happens’ to a company and the result maybe good or bad. Public relations (or PR)involve a sustained attempt to develop yourreputation as a business by using themedia to help create the image you desire.It is a way of keeping the business in yourcustomers’ eyes.

News or press releases can be distributedto the media to announce, for example,new product launches, a change in openingtimes or company successes. Articles canbe distributed to trade journals or localnewspapers, and sponsorship or charitabledonations can help to position yourbusiness more prominently in the marketplace than your competitors. Attendance atexhibitions and seminars can also help topromote the image of your business to achosen target audience.

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If you feel confident dealing with the mediayourself, then public relations can be a verycost-effective method of promoting yourbusiness.

Sales promotion – This activity is bestdescribed as a specific, usually short-term,promotion that is ‘over and above’ whatyou would normally provide to the customer(e.g. buy one, get one free).

When used effectively, sales promotionscan help to move old stock, counteractcompetitor activity, merchandise newproducts, encourage repeat buying andmotivate your staff. They can also bemonitored, so the success of a particularsales promotion can be measured overtime.

Sales promotions are a good way ofattracting new customers. However, ontheir own they are unlikely to build customerloyalty or change their longer term buyinghabits. The type of promotion selected also has to be relevant to your target customersas well as to your own marketingobjectives.

Direct marketing – Direct marketing s anincreasingly popular technique as it enablesyou to target specific customer groups veryaccurately. It is a flexible way to deliver yourmessage and, because each letter can bepersonalised, the chances of a response are greatly improved. The overallsuccess of a campaign can also be directlymeasured in terms of the number ofresponses received.

You can collect information on customersand use this to build up your own ‘in-house’ database. Although this can betime-consuming, the information gatheredwill be accurate and relevant to you, andcan be relatively easily kept up to date.

Alternatively, you can buy a mailing list of potential customers that is tailored toyour precise specification. For example, ifyou were selling ‘up-market’ motorbikesand associated products, you could buy amailing list that provided details of men over 40 years old, who own a bike, live in acertain postcode area and have a salary ofabove £25,000. The cost of buying this listmay be high, but if you get a goodresponse rate from your mailing activity tothis group, then the expense would beconsidered to be worthwhile.

Be aware that some false addresses maybe included in a purchased list so that theseller of the list can verify the mailing activitythat takes place and stop theft of a list.

Personal selling – This is the most effectiveform of promotion because it allows yourapproach to be tailored to the needs of anindividual customer. Getting a sale isultimately extremely important, but theprocess involves a lot more than this. It isabout having a constructive dialogue withcustomers to listen to their needs, promoteproduct & company benefits on anindividual basis, answer any questions,resolve any problems and get theirfeedback before clinching a sale.

Face-to-face, a sales person can build arelationship with the customer –understanding their needs and feeding backthis knowledge to the business to improveproducts, customer service standards,competitor knowledge etc. Employing asales person is a costly exercise in the firstinstance, but it is one that will provide a payback, usually within 1–2 years.

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For owner/managers of small businesseswho may not have sufficient resources toemploy such staff, do not forget that apersonal approach to customers is stillappreciated and is an important part of anybusiness development strategy. Activenetworking with existing customers,suppliers, business associations andspecialised industry groups can also play avaluable role in promoting your business toa wider target audience and the value ofthis activity should not be underestimated.

What to do nowOnce you have completed the plan for yourpromotional mix, you need to plan andundertake specific promotional activitiesand make sure they meet your objectives.

Advertising programmes – These can beexpensive and need to be planned ahead inorder to meet publishing deadlines.

Public relations – A campaign will only be asuccess if it has been planned, coordinatedand measured against a desired set ofresults.

Sales promotions – These need to beeffectively managed by setting objectivesfor each promotion and evaluating theresults after the event.

Direct marketing – Weigh up the benefits ofusing your own list against a bought-in listand whatever choice you make, beprepared to follow-up your activity to createthe sale.

Sales representatives – A sales force needsto be motivated and managed to achievesales targets. They require time andresources for training, motivation andpersonal development before they becomefully effective.

For more information on planning specificpromotional activities, see the 10-minuteMarketing Communication briefing.

Where to find out moreAdvertising – The Advertising StandardsAuthority at www.asa.org.uk is a goodreference point for UK standards and codeson advertising practice.

Public Relations - The Chartered Institute ofPublic Relations - www.cipr.co.uk

Sales promotion – Institute of SalesPromotion - www.isp.org.uk.

Direct marketing – The Direct MarketingAssociation (DMA) at www.the-dma.org

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An example in practice

APPENDIX 1

Greenfingers.com

Smelling of rosesDavid Murphy profiles gardening websiteGreenfingers.com

When dreaming up ideas for transactionalweb sites, one dealing in gardeningequipment, plants and everything else youfind in the average garden centre might notseem the most obvious choice. It's not thatthere isn't a market for garden equipmentand plants - a Mintel report published inApril '99 estimated that there were some 20million gardens in the UK, with nine millionhouseholds having both a garden andInternet access.

But if the acid test for an online transactionsite is how little it matters that potentialbuyers can touch, feel and even smell thegoods on offer, then a site selling live plantsand shrubs should, in theory, never havegot off the drawing board. But when ex-Times gardening correspondent GeorgePlumptre decided to get back intogardening after a spell working for anauction house, a gardening internet sitewas the only thing on his mind, andGreenfingers.com (www.greenfingers.com)was born.

Says Plumptre: "I saw that the internetcould provide a fantastic offer for thegardening public in terms of instantly-available information and help and advicelinked to the growing desire for people toactually buy things online." Plumptre washelped by the fact that at the time of thesite's launch in April 1999, unlike most ofthe other Internet "spaces"; there was nomajor European player in the gardeningsector. So while gardening consumerswere searching for information, he says,apart from garden.com in the States, therewas a lack of online resources to servicetheir needs.

"If there had been two or three big playersdoing it properly, it might have ground to a

halt because the investors would have saidwe were too late" he says, "but in terms ofhaving a mission to deliver, I would havetaken quite a lot of deterring."

Content, content, contentThe idea for the site, created by new mediaagency and shareholding partner,

Designercity, which incubated the projectuntil the first round of funding was secured,was conceived by Plumptre in the summerof 1999, followed by nine months' hardwork in putting together the content.

Given the breadth and depth of thiscontent, amounting to some 150,000pages in all, this was no small task. Aninteractive Plant Finder database, createdwith the help of expert botanists from theNatural History Museum, contains around7,000 species, enabling users to find theplant they want quickly. Users can searchfor a list of possible and probable plantspecies using criteria such as leaf andflower type, colour and growth habit. If theplants returned from a Plant Finder searchare not available from Greenfingers, the sitealso gives details of local stockists. Inaddition to the search facilities, the PlantFinder also offers detailed plant profiles andplanting tips for different types of garden,with information on aspect and soil type,plus personal preferences on colour, flowertype and season of interest.

Alongside the Plant Finder database is theRoyal Horticultural Society's NurseryDatabase, which holds details of more than400 nurseries and specialist growers on theUK dealing in rare and unusual plants. Atthe other end of the spectrum, the EssentialPlants directory has details of how tocultivate the 50 most popular families ofgarden plants, from heathers andhoneysuckle to lilies and lilacs.

A further database holds details of around1,000 gardens which are open to thepublic, with a visual review of each gardenincluding details on themed plantingschemes, unique features and a map ofhow to get there. On top of all this, there'sa monthly online magazine, plus around

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150 gardening workshops, with differentprojects designed for beginners,intermediate and experienced gardeners,and a gardening history section. This holdscomprehensive details of every style ofgardening through the ages, from Italianrenaissance to the contemporary landscapedesigns of the 20th century.

In addition to the information content, thesite is fully transactional, with 7,000 productlines on offer, including 6,000 species ofplant, plus a wide selection of gardeningequipment, including furniture, barbecues,greenhouses and garden tools. Goodsordered from the web site are delivered tocustomers between 4pm and 9pmweekdays, the delivery operationoutsourced to Securicor.

Greenfingers marketing director JonathanCowan believes it's this combination ofinformation and transaction that gives thesite its edge. He says: "Even now, whenthere are lots of other competitors outthere, no one has had the same vision thatwe have had, which is the fusion of contentand commerce. Everybody else out there iseither a shop with a little bit of informationto give them credibility, or they're aninformation site with little or no commerce."

Customer orders are dispatched from avariety of sources. A warehouse inBirmingham handles much of the hardware,though some lines are delivered direct fromthe suppliers. Plants are dispatched directfrom Eastfields, a company with manyyears' experience of supplying largenumbers of live plants around the UK.Turnaround on the plants is not particularlyfast, at up to 10 days and hardware isdelivered much more quickly, usually within48 hours. But Plumptre says the companyhas deliberately chosen to err on the side ofcaution, preferring to offer a level of servicethat it knows it can deliver, rather thanpromising the impossible - "even if itdoesn't sound as sexy as what one or twoof our competitors might be able to offer."Far from expecting the goods faster, saysPlumptre, consumers who take the time tocomplete the email surveys that go out toall consumers after their order has beenfulfilled are, on average more than happy

with the company's delivery performance,rating it somewhere between meeting andexceeding their expectations.

Though the Greenfingers team hasobviously thought through many of theproblems in running a transactional site,particularly those relating to fulfillment,Plumptre says the company has notmodelled itself on any other onlineoperation.

"There were no examples of the sort of e-commerce offer we wanted to do,embracing hard garden goods and liveplants and a variety of other items, so itneeded a structure of its own" he says. "Itwouldn't have worked if we'd seen astructure we liked and tried to apply it,because no-one has done this before.Selling a live shrub or a live tree is not likeselling a book or a CD-ROM."

The typical Greenfingers.com customer, thecompany says, is similar to the typical webuser, predominantly ABC1, but slightly olderthan usual, with an average age of around44, and a roughly 50:50 male to femalesplit, rather than the usual male skew foundamong web users. "Gardening is gettingyounger thanks to Charlie Dimmock andGround Force while the net is getting olderin terms of penetration" says Cowan. "Wemeet nicely in the middle." On marketing toits customers, Cowan admits that thecompany does not do enough yet in termsof individual or "one-to-few" targeting, butpromises that this will improve as thecompany hones its communications skills.

An experienced teamWhile clearly driven by his own passion forgardening, Plumptre, who fulfils the role ofeditorial director, has surrounded himselfwith a team which has a healthycombination of marketing, gardening andonline experience, bucking the trend set mysome b2c dotcoms. Chief executive officerHelen Bridgett was recruited from Tesco inspring 2000, after overseeing the launch ofthe Tesco Online brand in the UK in 1998.As head of online marketing, she presidedover rapid growth, as the brand hit £50million turnover in 1999.

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Prior to the Tesco role, she had alsoworked for Abbey National and BRMB.Marketing director Cowan came toGreenfingers from Dixons Stores Group,where he was brand development director.Prior to DSG, he had followed a traditionalmarketing career at Procter & Gamble,United Biscuits, Nestle and Spillers.Product sourcing is in the hands of GuyGrimes, who has 20 years procurementand fulfilment experience in the gardeningindustry in the UK and the States, whilenon-executive chairman Robin Klein sits onthe board of a number of new mediacompanies. "In terms of fulfilment, wedon't have your average MBA team tryingto work out how to do it" says Cowan, "wehave real people with real experience inblue chip companies."

The company is cagey about releasingfigures, revealing only that in terms of newmembers and unique visitors, it is meetingits targets, and that it is on track to hit itstarget of 800,000 unique visitors by the endof the site's first year in business.

It received £5m of first-round investment inFebruary 2000 from a consortium ofventure capital companies includingAmadeus and 3K Digital from the UK andDutch fund Gilde IT. The company won't bedrawn on future funding plans, however, oron when it aims to move into profit. It isclear, however, about its ambition to lookbeyond the web and use whateverchannels are available to reach newcustomers.

"The dotcom is not the important bit anymore," says Cowan. "Our competence is indirect home delivery. We can get thingsfrom us to your door, and whether you wantto shop over the Internet or digital TV, ormail order or telesales, we've now built aninfrastructure that can do all of them."

The company's first move away from theweb came with the launch of a mail-ordercatalogue, which was released in October.The catalogue, which features a 60-strongline-up of contemporary gardening gifts, isbeing distributed through inserts in a dozenconsumer magazines this autumn. The titlesinclude BBC Gardeners' World, GoodHousekeeping and Your Garden, and there

will also be a direct mail campaign targetedat established direct mail subscribersthrough the Book Club Association and theRoyal Mail. Almost 2 million catalogues willbe distributed in total. On the interactive TVfront, Greenfingers is going on Sky's Openhome shopping Extra platform, and thecompany does not dismiss the possibility ofopening Greenfingers bricks and mortarretail outlets one day.

Apart from providing Vodafone with a smallamount of content for its vizzavi WAP/fixedline portal, however, Greenfingers iscurrently doing little to explore the mobileInternet as a distribution or marketingchannel. "Everybody is experimenting, butnobody has a model yet which makesmoney on WAP" explains Cowan.

According to the results of an omnibussurvey conducted by the market researchcompany Ipsos over the summer theGreenfingers brand is second only to theBBC in awareness of internet gardeningbrands, and the company is working hardto raise its profile through a number of keyaffiliations. It has struck deals to providethe gardening content for several portals,most notably Freeserve, AOL UK and BTInternet.

Offline, the company designed and built thegarden, and acted as the official gardeningsupplier, to Channel 5's Jailbreak, the firstBig Brother clone to hit UK TV screens,which began in September. Withoutaccess to membership statistics or salesfigures, it's impossible to know for surewhether everything in the Greenfingers.comgarden is as rosy as it appears to be, butthe company certainly seems to have agood management team in place and anappealing combination of content andcommerce on its site.

With the b2c market in the doldrums andallegedly on most venture capitalists'blacklists, it's refreshing to find a b2coperation that seems to be working. Andwith one eye on the recent b2c backlash,Cowan offers an insight into whyGreenfingers intends to succeed whereother b2c online outfits have failed.

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"A lot of b2c dotcoms were run by peoplewho didn't have experience in managingbusiness-to-consumer operations" he says."They came straight from an MBA or theyjust had an idea. We believe that becausewe are a blue-chip management team in alarge market space, with experience ofrunning proper businesses, we willsucceed."

Finding out moreVisitwww.cim.co.uk/marketingresourcesgives more useful advice for smallbusinesses wanting to build on theirmarketing knowledge.

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Data Panel

Greenfingers.com at a glance

• Conceived: Summer 1999

• Launched: April 2000

• Content: 150,000 pages

• Product Lines: 7,000

• Including plant species: 6,000

• Unique visitors target: 800,000by April 2001