I'm conflicted between brand (Nike style ads) and direct marketing (FB ad talking about how awesome your product is and telling people to buy it now). Direct marketing has made us the most money so far, but there must be a reason why big companies are doing brand marketing. What percentage of your marketing strategy should be brand vs direct marketing?
It depends on the stage of your business. If you are at the beginning, spending money on brand advertising is a sure NO.
Which doesn't mean you shouldn't aim to build a brand... Building a brand is always good, it increases the value of your business allowing you also to sell it if you decide you want to exit and start something else.
Spend money on direct marketing, test and refine what works and test new, even cheaper avenues. And build your brand without investing money in advertising, start with defining the mission & main story of your business, its key values them creating a memorable identity- logo, main colors, main fonts, templates for all marketing materials, activities, channels, tagline that captures your brand essence, and finally making sure you are consistent using the above tools. Branding also takes a lot of time but as long as you are consistent and you do a good job with the elements above, you will be on your way and you won't need to spend money advertising it.
Obviously the more unique the business story & brand elements, the higher your chances to achieve brand awareness and recognition faster.
Percentage of both Brand Marketing and Direct marketing depends upon the sales promotion. To make things a bit clear let us walk through the Sales Promotion Process.
SALES PROMOTION DEFINED BY AMERICAN MARKETING ASSOCIATION: those marketing activities, other than personal selling advertising and publicity; that stimulate consumer purchasing and dealer effectiveness, such as display, shows and exhibitions, demonstrations and various non-recurrent selling efforts not in the ordinary routine. Sales promotion involves short-term incentives to encourage purchase or sales of a product or service. It has some characteristics which every marketer must understand to be able to use it effectively. These characteristics include: INSISTENT PRESENCE: many sales promotion tools have an attention-getting, sometimes urgent, quality that can break through habits of buyer inertia toward a particular product. They tell the buyers of a chance that they won’t have again to get something special. This appeals to a brand spectrum of buyers, although particularly to the economy minded, with the disadvantage that this type of buyers tend to be less loyal to any particular brand in the long run. (Stanley, 1977; Stanton, 1978)
PRODUCT DEMEANING: some of these tools suggest that the seller is anxious for the sale. If they are used too frequently or carelessly, they may lead buyers to wonder whether the brand is desirable or reasonably priced.
Certain factors have contributed to the rapid growth of sales promotion, particularly in consumer markets. These can be divided into two segments: -
I. Internal factors – operating within the firm
II. External factors – existing in the marketing environment.
Internal factors include the following: -
1. Promotion has become more acceptable to top management as an effective means to stimulate sales
2. More product managers are qualified to use sales promotion tools
3. Product managers are under greater pressure to obtain quick sales response
External factors include the following: -
1. The number of brands has increased.
2. Competitors have become more promotion-minded
3. Inflation and recession have made consumers more deal oriented.
4. Trade pressure for more manufacturers’ deals has grown
5. There is a belief that advertising efficiency has declined due to costs media cluster, and government control.
Overall sales promotion techniques make three contributions to exchange relationships between the market and consumers.
Communication: they give attention and usually provide information that will lead to trying the product.
Incentive: they incorporate some concession, inducement, or contribution that is designed to represent value to the receiver.
Invitation: they include a distinct invitation to engage in the transaction immediately.
A marketer that is considering using sales promotion must follow these steps to plan, execute and evaluate the promotion tool.
1. Establish the sales promotion objectives
2. Select the sales promotion tools
3. Develop the sales promotion programme
4. Pre-test the sales promotion programme
5. Implement and control the sales promotion programme
6. Evaluate the sales promotion results.
Sales promotion objectives are derived from basic marketing communication objectives, which in turn, are derived from more basic marketing objectives developed for the product. Within this context, the specific objectives set for sales promotion will vary with the type of target market. For consumers, objectives include encouraging more usage and purchase of large-size units by users, building trial among non-users, and attracting trial by other brand users. For retailers, objectives include inducing retailer stocking of new items or larger volume, encouraging off season buying, encouraging stocking of related items, offsetting competitive promotions, building brand loyalty of retailer, and entering new retail outlets. For the sales force, objectives include encouraging support of a new product or model, encouraging more prospecting and stimulating sales in off-season.
Various sales promotion tools are available to accomplish promotion objectives. The selection decision must consider the type of market, sales promotion, objectives, competitive conditions, and cost-effectiveness of each tool. Promotion tools include:
1. Samples, coupons, price packs, premiums, and trading stamps
2. Point-of-purchase displays and demonstration.
3. Trade promotion.
4. Business conventions and trade shows.
5. Contests, sweepstakes, and games.
A sales promotion programme involves more than selecting one or more promotions. The marketer must make some additional decisions to define the full promotion programme. The main decisions include:
i. Size of incentive
ii. Conditions for participation
iii. Distribution vehicle of promotion
iv. Duration of promotion
v. Timing of promotion
vi. Overall budget for promotion
Sales promotion pre-tests should be conducted whenever possible to determine if the tools are appropriate, the size of the incentive is optimal, and the method of presentation is effective.
Effective control of sales promotions requires that specific goals and implementation plans for individual promotions be established. Programme implementation must cover two critical time factors, lead time and sell-off time.
LEAD TIME is the time necessary to bring the programme up to the point of announcing the deal to consumers and the markets.
SELL-OFF-TIME begins at the date of release and ends when approximately got to 95 per cent of the deal merchandise is in the hands of consumers, which may take one to several months, depending on the deal duration.
Evaluation is a crucial requirement for improving any programme. Marketing firms can use any of four methods to measure sales promotion effectives. The four methods include-
1. Sales Performance Movement: this will be done before, during and after a promotion campaign. Suppose a company has a 6 per cent market share in the pre-promotional period, which jumps to 10 per cent during the promotion, falls to 5 per cent immediately after the promotion, and rises to 7 per cent after some time. In this case, the promotion evidently attracted new triers as well as more purchasing from existing customers. They loaded up on the goods, and after the promotion, sales fell as consumers worked down their inventories. The long-run rise to 7 per cent indicates, however, that the company gained some new users. In other cases, the brand’s with result that the promotion only altered the time pattern of demand rather than the total demand.
2. Consumer Panel Data can be used to examine the kinds of people who responded to the promotion and what they switched to after the promotion. A study carried out by some researchers, using consumer panel data for a sales promotion enhance brand switching, the rate of switching, depending on the type of deal offered in the sales promotion. Media– distributed coupons induce substantial switching, a discount-off deals induce somewhat affect brand switching. The study showed in addition, that consumers generally return to their preferred brand after the deal.
3. Consumer Surveys can be conducted to learn how many recalled the sales promotion, what they thought of it, how many took advantage of it, and how it affected their subsequent brand choice behaviour.
4. Experiments: sales promotions can also be evaluated through carefully arranged experiments. Some large companies test alternative strategies in selected market areas with each of their national promotions. Sales promotion can play an important role in the total promotion mix. Although it is used on an ad hoc and residual basis by many firms, it can be used more systematically and effectively by defining the sales promotion objectives, selecting the appropriate tools, constructing the sales promotion programme, pre-testing it, implementing and controlling it, and evaluating the results.
STRENGTHS OF SALES PROMOTION:
1. Sales promotion stimulates positive attitudes from middlemen towards the product
2. Sales promotions provide additional inducements for customers purchase action
3. Sales promotion is flexible; it can be used at any stage of a new product.
CONDITIONS FOR EFFECTIVE USE OF SALES PROMOTION:
1. When a new brand is being introduced
2. When a major product improvement in an established brand is being communicated to the market
3. When the brand that is being promoted is already enjoying an improving competitive trend
4. When the company is trying to increase store distribution and sales promotion is used to help to sell to middlemen
5. When a branded product is being advertised and sales promotion is used to amplify the results of the advertising.
WEAKNESSES AND LIMITATIONS:
i. Sales promotions are temporary in nature and short-lived
ii. Sales promotion has to be used with one or more promotional tools
iii. Sales promotions are frequently non-recurring time, funds and efforts put into them are usually non-reusable
iv. Too many sales promotions on a branded product may hurt the product’s brand image because they may suggest to consumer that such product is a less popular brand of the company or that the company is overstocked or that the product is cheap
v. Advertising creativity is typically low in sales promotion – advertisers do not put their best copy.
CONDITIONS THAT CAN CAUSE INEFFECTIVE SALES PROMOTION:
1. established brands with no product improvements
2. established brands with a declining market share
3. brands where sales promotions are established as a way of doing business
4. product classes where intensive competition exists on consumer sales promotions.
FORMS OF SALES PROMOTION:
1. Point-of-purchase advertising – displays
2. Premiums – free give away coupons-redeemable cash off coupons
3. Coupons – redeemable cash off coupons
4. Sampling – free trail of product or sampling
5. Deals – save money on purchases offer
6. Contest and sweepstakes – prizes and raffles
7. Advertising specialties – calendars, pens
8. Cooperative advertising – joint promotion between producers and distributors
9. Booklets, brochures and mailing pieces.
OBJECTIVES OF SALES PROMOTION:
1. Supporting the sales force and its merchandising efforts
2. Gaining acceptance and active support for middlemen in marketing the product
3. Increasing the sales of the product to consumers.
Once we have dealt with sales promotion now we can compare both of the types of marketing, to be frank with you it is not possible for a company to ascertain a percentage on either of them, because of various socio-political factors governing market place. I will suggest you that before you embark on percentage decision do a PESTLE analysis of not only of your country but also your marketplace. PESTLE analysis, which is sometimes referred as PEST analysis, is a concept in marketing principles. Moreover, this concept is used as a tool by companies to track the environment they are operating in or are planning to launch a new project/product/service etc. PESTLE is a mnemonic which in its expanded form denotes P for Political, E for Economic, S for Social, T for Technological, L for Legal and E for Environmental. It gives a bird’s eye view of the whole environment from many different angles that one wants to check and keep a track of while contemplating on a certain idea/plan.
If you are buying direct marketing ads, measure everything. Compute how much it costs you to earn attention, to get a click, to turn that attention into an order. Direct marketing is action marketing, and if you are not able to measure it, it does not count.
If you are buying brand marketing ads, be patient. Refuse to measure. Engage with the culture. Focus but mostly, be consistent and patient.
If you cannot afford to be consistent and patient, don’t pay for brand marketing ads.
What I just shared with you ought to have paid for the time and money you have spent reading my posts, emails, website and watching my videos.
When you know what kind of marketing you are engaged in, you will set the right expectations.
Types of direct marketing include:
i. Google Ads
ii. Facebook Ads
iii. YouTube Ads
iv. Email Marketing
v. Solo Ads
They are Ads you can track directly to a sale.
Types of brand marketing include:
I. Billboard signs
II. The way you answer your phones
III. Your uniforms
VI. Networking events
VII. Company culture
The list above is not exact, but I think you get the point. Different platforms can be used for both direct and brand, but the difference is your expectations, goals, and measurements. Small start-ups get too caught up in their brand. They spend time, money, and energy dealing with brand experts and not enough time building out direct marketing campaigns. Big brands try to make a shift into direct marketing and use branding techniques and wonder why nothing worked.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath