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Asked by spicydani | Apr 22, 2008 | University Level > Economics > Homework
spicydani asks:

A beverage company wants to introduce a new soft drink in the market.
You are a marketing manger in that company. A task has been assigned to
you to promote that soft drink. So what are the different ways through
which the soft drink will be promoted to the customer?

etutor answers:

This is essentially a question about the Marketing Mix - the 'four Ps' of Product, Promotion, Price and Place. Much here will depend on whether the promotional campaign is to be based on the excellence of the new product; if so, the quality and design of the soft drink must match the expectations of the promotion. Such a campaign would be consistent with a high price and upmarket retail outlets. By contrast, if the main focus of sales is to be in supermarkets then this has implications for price (lower) and bottling/canning (attractive, but probably fairly basic). It is also critical to know here whether we are dealing with an established company with a strong brand name, since if this is the case the company may wish to present the new soft drink as an addition to an already popular range, hence transferring some of the existing brand loyalty to the new product. So much therefore depends on the NATURE of the company and of its existing product range.

The key aspect of the marketing mix here is promotion. Firms generally base their promotional decisions on cost effectiveness, and of course on the size of the marketing budget allocated. This in turn will depend in part on the sales/marketing objectives, the actions of competitors and the typical level of advertising and promotion for the industry. The company will also need to look at the cost of advertising/promotion in each of the possible media, as well as the nature of the market, the expectations of consumers, and the potential return compared with other promotions.

To establish the choice of 'ways' in which the new beverage will be promoted the company will need to assess:

1. Differentiated vs. Undifferentiated Promotion - Whether the new drink is to be aimed at a mass market (implies media with a broad coverage, such as TV and national press will be used) or at a niche market (defined in terms of income level, age, region, etc) (implies promotions will focus on media that are used by consumers within that niche)
2. Market Segmentation - Some target markets are easier to reach through specialist media - so, for example, if it is a Lucozade-style product, then one obvious focus will be health magazines; if it is designed to appeal to trendy yuppies, this then dictates mags such as Cosmopolitan and the like.
3. The company's database. An established company will already have information about its customer base and so, unless it is branching out into entirely new markets here, it is likely to use direct mail, or even the internet to contact them with details of the new drink. There are likely to be special introductory offers.
4. Association of the new drink with star celebrities is a very common, and often effective tactic. Getting a sponsor is even better.
The appearance of the product and its label will be critical factors. If the soft drink can complement an existing alcoholic drink manufactured by the company (i.e. a new mixer) then the two can be marketed together, with the stress on the established nature of the alcoholic product.

There is almost always a test market for soft drinks before the launch. To a large extent this enables research into consumers' reactions to the NAME of the product, which is often finalised only before the launch proper.

I hope these ideas are helpful.

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