Actual case:
Early July 2003, Zhongguancun, a printer manufacturer (hereinafter referred to as A Company) through the summer to a mid-range inkjet printers dropped to less than the price of 900 yuan (899 yuan), results in a very short period of time, this printer sales improved 30%. Half a month later, another competitor (hereinafter referred to as B Company) was found to bring lower prices because A company's sales decreased by 5% a year earlier. Faced with this competitive pressure, B Company, after the contents of discussion, decided to start from the end of July shot a 888 in the summer preferential prices lower than the A company of 11 yuan. The results, in August compared with B Company of the printer sales up 25% in July, on the contrary, A company in August compared with July sales down 15%. In September, the company's sales levels gradually returned to normal sales levels.
The two companies in product positioning and normal users usually sold roughly the same, so the two companies according to promotional changes, we can see the following changes:
Case Study:
A business case for any increase of the size of A is the key to marketing success. A number of factors affecting growth, including promotion of the range, in the form of promotions, price sensitivity and other user groups, all of which must be done in the promotion before the start of a full analysis.
When the promotion finalized and will be started when the promotions will be the sales success of the release of another key point.
It is assumed that the market price-sensitive have 500,000 users (since they heard the news of promotional price cuts to buy a printer), these users each month, 5% of the users have to purchase plans, and to the market to buy. In a media communication and dissemination of the promotional effect of free media as follows:
1. No media coverage of the situation:
July Enterprises Promotion Scheme A, 5% of the price-sensitive customers (hereinafter referred to users are price sensitive users) to the market to buy computers, this 5% (2.5 million) of the price-sensitive customers in the market know A business promotion, 80% of such temptation to give up the price of other brands, bought A business printer. This means that, in July A business promotion will bring incremental sales of 20,000. In the absence of any media communication (advertising / promotion news) cases, 95% of the price-sensitive users (47.5 million) did not know A business promotions. The needs of these users have not been triggered.
August, B Company implemented a marketing plan, not to buy the price-sensitive users (47.5 million) in the same 5% of the market to buy computers, they select the printer, 80% (1.9 million) have chosen B business printer. At the same time, A promotional price-sensitive business users less attractive, sales drop.
Conclusion: A Company and B Company promotional effects are similar (20 000: 1.9 million)
2. A corporate media communication (information arrival rate of 50%) and B is not spread of the enterprise:
A company assumed in July during the promotion through the media, the information to the user not to purchase the market (47.5 million), information arrival rate of 50%, the promotional messages that people have to buy 30% of the resulting program. Thus, in addition to no media coverage of the 20,000 increase in sales, the media has brought part of the incremental transmission: 7.1 million (475,000 脳 50% 脳 30%). This promotion brought incremental sales of 9.1 million.
B Company began sales in August, after the user has not purchased (409,000) 5% (the actual situation is often lower than it) produced a purchase plan, of which 80% of the reasons for the price to buy a printer company B, it will bring incremental sales to about 16,000.
Conclusion: A corporate promotion effect is much better than the promotional effect of B Company (91000: 16 000)
3. A non-media communications and business enterprises spread of the B (information arrival rate of 50%):
A company's marketing results with the first case (20,000 incremental sales).
B In addition to the store for business users to bring the 19,000 incremental sales, the promotion through the media messages to a 50% in July and August did not purchase not present the user ((500 000 -2 10 000) * 95% = 456 000), of which 30% of the resulting purchase program. Thus, in addition to the store bring incremental sales of 19,000, the sales through the media also caused an increase of 6.8 million (456,000 * 50% * 30%). Zhe Yang B to bring the sales promotion business in increments of 87 000.
Conclusion: B Enterprises Promotion effect much better than A business promotion effects (87,000: 20,000)
4. A Company B Company were made with results similar media communication (information arrival rate of 50%):
A business promotion effect in July with the first two kinds of case, promotion to bring incremental sales of 9.1 million units.
August B Company began marketing to the store of the user (409,000 * 5% = 20 000) in 80% of the purchase of B Company of the printer, bring incremental sales of 1.6 trillion. Promotion of information dissemination to the media to reach 205,000 (409,000 * 50% = 205 000) users, 30% (the actual situation would be even lower, because these users in the last round of promotions in the business A description has not been changed purchase plans ) resulting purchase program, it will bring incremental sales of 62,000.
Conclusion: A company's sales was better than A company's marketing effectiveness (91 000: 78 000)
General conclusion:
1) Good media coverage will be effective in enhancing the effect of product promotion; 2) product sales in the timing, magnitude, scale, spread all the best circumstances, the promotion will receive an unexpected return; 3) the lack of good communication support, marketing can actually become a winning opportunity for opponents; 4) simple price-oriented promotional activities, effects can be described by the following mathematical model: E = C 脳 (P 脳 F + (1-P) 脳 I 脳 A ) E: promotional bring incremental sales; C: volume of price-sensitive users; P: price-sensitive users plan to buy the promotional period, the proportion; I: media dissemination of information arrival rate (0% -100%) ; A: purchased by the user to change the percentage of sales; F: buy users, because the ratio of sales to change the brand of choice.
Analysis of specific situations:
On the dissemination of promotional work is not done, I close to "0", therefore, the formula becomes: E = C 脳 P 脳 F in the ideal spread of state, all users are aware of promotions, I close to "1 ", the formula becomes: E = C 脳 (P 脳 F + (1-P) 脳 A) for a specific time to carry out a specific market-specific promotions, C, P, F, A are constant, therefore: E = f (I)
That promote dissemination of the results depends on the arrival rate, and, according to the formula above we can see, E = f (I) is an increasing function, which means that the dissemination of information as the arrival rate of increase, promotion, the better.
Cost principles:
If the only effect to consider from a marketing, business expectations "I" values tend to "100%", ie, all users knew the information. However, in practice, the promotion effect is not the goal, profit target is the key. With the "I" value improvement, business investment in the dissemination of the increasingly high cost, these costs will not only promote the gradual digestion effect profits, and even higher costs increased faster than profits.
Therefore, all the promotional information dissemination is necessary to control the search for a more favorable balance in order to gain promotion the best results.
In addition, the same information arrival rate, the spread of cost control is also important, choose low-cost, efficient means of communication is essential.
The spread of the existing, mainly the means of transmission of advertising, public relations (soft Chinese), direct postal, modalities which to electronic direct mail Chengbenzuidi, but the electronic direct mail on Taizhongxiaofei products do not Shige, Yi Ban Hennanzhaodao high coverage of the database to do support. In general, the highest average cost of advertising, therefore, that such communication to media and public relations-focused, properly supported by advertising and direct mail.
For the smaller customer base of professional products, direct mail often have a stronger cost advantage, so you can consider direct mail as the focus.
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