Free Management Essays - Philip Kotler (1988) Argues That Promotion Of The Products through innovative promotional activities and advertising
1.0: Introduction
Philip Kotler (1988) argues that promotion of the products through innovative promotional activities and advertising is the key element for the success of a product irrespective of the quality of the product and its brand image in the market. This is mainly because of the fact that the promotion of a product is predominantly the communication of the various offers in place for the customers that revolve around the products of the organization. In this report, the exiting promotional plan and related activities of the organization TAO Health and Beauty Spa is presented to the reader. This is followed by the critical analysis of the effectiveness and constraints of the existing promotional activities. The analysis aims to identify the potential areas for improvement in the exiting promotional plan of the company.
Finally an alternative approach to the promotional activities is presented to the reader. This section emphasises on the areas where the company might face challenges and provides a vivid contingency plan for the promotional activities of the company.
2.0: Overview of the business
Health and beauty is increasingly considered as an essential element of the day-to-day life of the members of the public. This is clear from the increase in the number of the health clubs across the UK as argued by Rozmeen Tambe (2004). The company under investigation: TAO Health and Beauty Spa is located in the Ribble Valley of the Lancashire providing specialist health and beauty services to the customers. The company specialises in providing customised treatment packages to meet the customer requirements. This is clear from the extensive product range of the company in health and beauty treatments for both men and women. Apart from focusing upon the trivial areas of beauty like facelift and waxing of the body, the company focuses upon the overall treatment of the body as well as create an atmosphere to relax the mind of the customers for accomplishing total rejuvenation of the body and mind. Alongside, the company provides specialist fitness services through its HICKS fitness centre. The main objective of TAO Health and Beauty is to rejuvenate the body and mind through relaxation. This makes it clear that the organization is not only upon the beauty services but also to encourage the customers towards a healthy living.
3.0: Promotional Objectives of TAO Health and Beauty Spa
Frances Brassington and Stephen Pettit (2003) argue that the promotion activities of an organization will be successful only through the identification of its promotional objectives. This is also justified by the arguments of Lee Richardson and Vince Luchsinger (2005) who argue that the promotion objectives are the critical elements for the success of promotion plan (or activity) in an organization. This is also because of the fact that only through identifying the objectives, an organization can effectively deploy its resources both men and material to increase the sales.
The mission statement of the organization 'Rejuvenation from relaxation in a timeless world of harmonious luxury!!' reveals the following promotional objectives of the organization:
- Emphasise upon the health and relaxation of both the body and mind.
- To increase sales through promoting innovative methods of treatments to meet specific requirements of the customers.
- Cross-Selling through the promotion of the HICKS health and fitness centre
- Increase the sales through the use of approved brands of products for ingredients to the treatments.
- To increase the customer base for HICKS fitness centre through the promoting customised membership packages and events.
- To increase the awareness of the health and fitness through communication of the events and updates on the dedicated websites for the SPA and the fitness centre respectively.
Since the company is located in the Ribble Valley, which has a reputation for tourism, the customers for TAO Spa are not only from the resident areas of the Ribble Valley but also comprise of the visitors and the holiday makers who would be interested in the health and beauty treatments as part of their holiday package. Alongside, it is also interesting to note that the visitors to the Ribble Valley have increased in geometric progression since 2004, which is evident from the involvement of the Ribble Valley Borough Council in the promotion of the events and activities in Ribble Valley to attract visitors.
It is also interesting to note that the promotional objectives of the company under debate is focused upon not only attracting new customers but also retaining the existing customers through the deployment of the membership packages and related promotional activities which mainly involve the reduction in price for the service and special discounts.
It is imperative for any organization to note that the promotion and promotional activities should embrace its promotional objectives mainly because of the fact that the promotional objectives are not only used to guide the promotional activities but also to measure the level of success through the promotional activities. The alternative approach dealt in section 7.0 provides a profound analysis on this topic.
4.0: Promotional Activities
The promotional activities deployed by TAO Spa and the HICKS fitness centres are not only innovative but also focused upon increasing the sales through providing valuable service to the customers. A brief overview of the promotional activities is described in this section.
4.1: Advertising
An overview on the company website and its activities has revealed that the company focuses upon promoting its products and services through advertising its products and effectively communicating its services to the customers both through the website as well as utilising the local newspapers.
It is also clear that the company is working in collaboration with the key hotels in the Ribble Valley to attract new customers among the visitors to the hotel. Through this process the company has not only promoted its products but also built a strong customers base through operating in collaboration with other leisure industry players.
The club extras of the Fitness club (HICKS) reveals that the company not only utilises the advantages of advertising and media but also increases its sales through the sales promotion and point of sale in both the websites i.e. HICKS Fitness centre and the TAO Beauty SPA.
4.2: Cross Selling
Philip Kotler and Kevin Lane Keller (2005) argue that the cross selling is a successful strategy in the leisure industry. This is clear from the promotional operation of the HICKS Fitness club that embraces the TAO Spa as part of the premium membership package whilst the TAO Spa promotes the HICKS fitness club in its website. This makes it clear that the company is deploying the cross-selling strategy effectively in order to increase the sales as well as broaden the customer base.
From the above overview on the promotional activities it is clear that the company is predominantly utilising the power of online marketing through the deployment of robust information websites for TAO Spa and HICKS Fitness centre. This innovative approach of promoting the products and services is not only successful but also cost effective since. This is because of the fact that the Internet users have drastically increased with the increase in electronic commerce and online shopping. The boom of the Internet as a comprehensive information source have increased the extent to which the users visit the website for information about latest promotion.
This innovative approach to maintaining the up-to-date information over the Internet is one of the major elements that contribute to the successful promotion of the products and services of the company.
5.0: Effectiveness of the Promotion Activities
From the previous section it is clear that the company is deploying the promotion activities through advertising its products over the Internet and the use of media. This proves the effectiveness of the advertising strategies of the company. Alongside, it is also interesting to note that the company through the partnership with the hotels has successfully promoted its products and services. The effectiveness is evident from the increase in the customer base for the company especially amongst the visitors to the Ribble Valley.
The increase in the holiday makers and the potential of this market was harnessed by the company through effectively advertising its products and services of the TAO Spa as not only a luxury product but also as a health option thus promoting its importance both as a luxury product as well as a rejuvenating and relaxing activity for the holiday makers. This strategy of promoting the products is seen in the wide product range and the customizing options which not only increase the flexibility for the customers to choose from a wide range of products but also increase the overall sales for the organization. This proves the effectiveness of the promotion activities of the company.
Apart from the focus of the organization on the health and beauty, the operation of the HICKS Fitness club is another accelerating element to the overall promotion activity since the promotion of the products and services of TAO Spa through the club membership in the HICKS Fitness club is a successful strategy to attract new customers from among the local residents. This approach not only increases the sales but mainly sustains the stability of the company in the geographical location since it is essential to maintain a sustainable customer base among the local residents to maintain the stability in the sales as argued by Philip Kotler and Kevin Lane Keller (2005).
The cross selling strategy of the organization which was discussed in the previous section is one of the major elements that attribute to the effectiveness of the promotion activities since the overall promotion activity of the organization is focused upon the promotion of the overall product range thus increasing the awareness of the company's products and services to the general public.
The deployment of the website as an information source and the vivid presentation of the promotions online has not only increased the customer awareness in the local geography but also among the visitors to the Ribble Valley. This proves the effectives of the promotion through the Internet mainly attracting the holidaymakers to the Ribble Valley.
Apart from the above-mentioned, another element that contributes to the effectiveness of the organization's promotion activities is the brand loyalty of the organization itself. The co-branding strategy adhered by the organization with Body Pump and Body Balance, the company is not only striving to establish itself as a brand but also increased the product awareness and the overall reputation of the organization.
The above arguments justify the effectiveness of the promotional activities of the organization. A critical analysis of the constraints faced by the organization is presented in forthcoming section.
6.0: Constraints
6.1: Internal Constraints
The major internal constraint faced by the promotional activities is the mission statement of the organization. The mission clearly focuses upon providing rejuvenating service in a luxurious manner. This makes it clear that the price of the products and the services are comparatively high to its competitors and whilst deploying a promotion activity, the company faces the cost overhead since whilst providing quality service at a lower price rate. This also increases the need to identify competitive suppliers for the ingredients to their products. Since the company is focusing upon the branding and reputation of the organization, it is essential to maintain the standards of service, which is a barrier for the effectiveness of the promotion activities within the organization.
Apart from the issues of cost and reputation associated with cost reduction activities, the major internal constraint faced by the organization is the promotional objectives itself. This is because of the fact that the adherence to the promotional objectives is essential for the success of the promotion activities but the successful implementation of is affected by the internal factors like the resource allocation and market research. This is because of the fact that the resource allocation within the organization to respond to the promotion activities is essential to meet the promotional objectives. The constraint faced is the difficulty in achieving a balance between the resource allocated to the promotional activities and the day-to-day routine of the company as argued by Frances Brassington and Stephen Pettit (2003).
Apart from the aforementioned, the two major constraints unique to the promotion itself are the promotional budget and the time scale associated with the promotion activity. This is because, a promotion activity in itself is bound to a specific time scale and hence it is essential to accomplish the objectives of the promotion within the time scale. Alongside, the budget for the promotion is another major element since the company should allocate the resources effectively and meet the expenses of the promotion through the budget. In the case of the company under consideration the constraints with respect time scale is mainly during the month of August when the Last night of the Proms, Clitheroe Castle is an important event that attracts potential sales for the organization.
6.2: External constraints
The major external constraint faced by the organization is the competition. This is because of the fact that the company operates as a premium service provider with branded products, which apparently increases the price of the services comparative to those provided by the competitors. Since Ribble Valley is a popular place of attraction the competition faced by the organization is intense thus making it complex for the promotion of the products. Alongside, the competition faced by the organization is not only in terms of the price but also through the operation of the health and beauty services by the hotels as an extension to their services thus increasing the competition for the organization. Even though the company specialises in the Health and beauty Spa, the psychology of the visitors is in general to look opt for a package attached to their place of stay which is not only competitive in price but also in quality of the service offered. This makes it clear that the competition is a major external constraint faced by the organization.
Another major external constraint faced by the organization is the legal requirements for fair play. The joining of the UK in the European Union and the enforcement of the competition law is one of the major elements that affect the promotion activities of the organization. This not only constrains the promotion in terms quality of product but also in terms of pricing. This apparently acts as a barrier for the organization whilst designing the price of the product, which is essential for the success of the promotion. Under the competition law and the regulations the company cannot reduce the price of the product below a threshold level for the given quality, which makes it difficult for the organization to fix the price of the products and services as part of the promotion activities.
Apart from the aforementioned, the environmental issues are one of the major external factors that affect the promotion activities. Even though the company is focused on the health and fitness, the restrictions of the urban policies is a major constraint for the success of the promotion activities. In case of the Ribble Valley where the Ribble Valley Borough council has strict regulations for environmental awareness and, the deployment of the services of the organization in an extensive manner as part of the promotion will increase the level of contamination of the natural resources through the ingredients used by the business. This constraint should be addressed whilst designing the promotion plan, which further constrains the overall promotion plan.
From the above arguments it is clear that the constraints faced by a promotion plan and the promotion activities of an organization are affected by both the internal and external factors. An alternative approach and contingency plans for the promotion activities of the company is presented in the next section before concluding the report.
7.0: Alternative Approach
From the overview of the promotion activities of the organization, it is clear that the company is focused on the promotion of its products mainly through the cross selling and online advertising strategies. It is clear that the involvement of the organization with the external activities sponsoring events is limited even though it is located in one of the key places for holiday in the UK. The involvement of the organization with the public events is essential in order to increase the awareness among the customers as argued by Roy C. Anderson and Jim L. Bowyer (2003).
The existing approach to the promotion in focused more internally i.e. the company focuses upon the promotion of the products and services with the promotion activities revolving around the organization itself. For example, the Club Extras in the HICKS fitness club is a classical example where the organization has numerous options that would encourage the existing customers but has only one option to invite a guest who might become a potential customer. This approach has even though successful in retaining the existing customers does not create a high level of awareness among the general public in order to attract new customers.
From the above arguments, the potential areas where the promotion activity can fail are identified as follows
- Lack of external involvement by the organization.
- Lack of focus upon potential customers or attracting new customers.
- Lack of awareness among the public about the promotional activities.
The constituents of the alternative approach to the promotion activities are thus deemed as follows
- Direct marketing: The organization is encouraged to involve in the direct marketing through the leaflet campaign or other methods of face-to-face communication with the general public in order to increase the awareness among the public about the promotion in place. It is deemed that the leaflet campaign will be successful in creating the awareness among the customers in the target market. This is mainly because of the intense competition in the business and the seasonal nature of the beauty spa promotions, which is predominantly focused upon increasing sales during the holiday season.
- The cross selling strategy of the organization combined with the co-branding strategy can be deployed to accomplish promotion of the TAO Spa as well as HICKS Fitness centre through the direct marketing strategy.
- Public Relations: It is argued that the public relations are an essential element for the success of the promotional activity. This is mainly because of the fact that an organization can accomplish the process of creating awareness as well as attracting new customers through effective public relations. Since the company's current promotion strategy is internally focused, an external outlook is essential in order to increase the awareness and prevent failure of the plan.
7.1: Effectiveness of the alternative approach
Since the company has a wide product range and also deploys innovative methods of product customisation and servicing its customers, the external focus of the organization will increase the level of awareness among the members of the target market.
The fact that the effective public relations of an organization will increase its reputation in among the public as argued by Philip Kotler (1988) justifies the above statement. It is also interesting to note that the external focus of the organization will not only increase the awareness among the public but also provides a dynamic environment for the organization to quickly respond to the changes in the market thus increasing the stability of the promotion plan.
Another key element to highlight in the alternative approach is the ability of the organization to cross-sell its products i.e. TAO Spa and HICKS fitness whilst conducting the promotion itself in a dynamic environment. This makes it clear that the
External focus of the organization is not only successful in terms of the quick response to changes but also effective to increase the awareness on the promotions in place.
7.2: Constraints and contingency
The major constraint with the alternative approach is the need for quick response to changes. With the increasing competition and the need to not only create awareness but also provide a competitive package to the target customers is essential. This is due to the reason that the market changes are volatile in nature and hence response to the changes is essential. The lack of this ability to quickly respond to changes is the primary constraint in the existing set-up. As a contingency measure to meet the changes in the market, the spending level upon the direct marketing elements like the leaflets and the human resource is managed on a stage-by-stage basis since a change at any point of time will provide the ability to direct the expenses towards meeting the change and hence staying well within the budget.
Another constraint faced by the organization is the competition regulations and the legal aspects of the promotion plan. In order to overcome this issue, it is recommended to work with the local authorities in charge so as to gain prior approval of the promotion plan before deployment. Alongside, as a contingency it is also recommended to set aside a portion of the budget to meet any changes to meet the policies or legal regulations. This approach not only increases the stability of the promotion plan but also increases the control of the organization over the budget thus providing a controlled deployment of the plan.
7.3: Monitoring progress
The progress of any promotional campaign is dependant upon the extent to which the target market is aware of the promotions in place. An accurate measure of this value is technically impossible since the consumer behaviour which is the contributing element for the measure of awareness is not a quantitative factor as argued by Frances Brassington and Stephen Pettit (2003). This is because the consumer behaviour is deemed to be purely qualitative and a quantitative measure of for this attribute is possible only through a market survey or questionnaire, which is not a viable option. Another method for measuring the progress is through the measure of the increase in the sales and the increase in the enquiries about the product, which is directly proportional to the level of awareness and the interest of the customers in purchasing the product. Philip Kotler (19988) argues that the progress of a promotional campaign is directly proportional to the level of increase in the sales. This justifies the above argument on measuring the progress of the promotional campaign.
7.4: Implementation Plan
The implementation of the proposed promotional campaign is through the following stages
Stage 1: Initial direct marketing and leaflet campaign. In this stage the organization should strive to provide information on the promotions in place for the customers rather than focusing upon pushing the sales. This is because; the initial stages of the promotion should be focused upon the process of creating awareness among the customers.
Stage 2: Review: An internal review of the level of success of the promotional campaign is conducted through measuring the sales raise and the level of queries received by the organization. Through the analysis in this stage, the company can derive upon a more focused promotional campaign in next stage.
Stage 3: Promotion focusing upon sales: In this stage the organization is expected to push the sales of the promotions in place. The company should deploy innovative methods to communicate to the target customers effectively. It is in this stage the organization should devise the promotional plan that is not only focused upon increasing sales but also upon effectively maintaining the public relations in order to increase the sales of the products and achieve sustainable competitive advantage.
8.0: Conclusion
From the Analysis of the existing promotional plan of the organization under debate, it was derived that the plan is not only effective but also faces constraints. The contingency for meeting such constraints were not in place even though the company effectively deployed the branding and cross-selling strategies. The alternative approach to the promotional campaign discussed in section 7 reveals that the external focus with the deployment of the existing strategies of cross selling and co-branding will prove successful.
9.0: References
Books
Frances Brassington and Stephen Pettit (2003), Marketing Management, UK: Prentice Hall Financial Times
Philip Kotler (1988), Marketing Management: Principles and Practise, UK: Prentice Hall
Philip Kotler and Kevin Lane Keller (2005), Marketing Management 12th Edition, UK: Prentice Hall
Journals
Lee Richardson and Vince Luchsinger (2005), Direct-To-Customer Advertising of Pharmaceutical Products: Issue Analysis and Direct-To-Consumer Promotion. Journal of American Academy of Business, Cambridge, Sep2005, Vol. 7 Issue 2, p100-104
Rozmeen Tambe (2004), Market Review: Health and Beauty Clubs, UK: Key Note Ltd
Roy C. Anderson and Jim L. Bowyer (2003), INDUSTRY-WIDE PRODUCT PROMOTION WITHIN COMMODITY INDUSTRIES: AN OPPORTUNITY FOR THE FOREST PRODUCTS INDUSTRY?, Forest Products Journal, Nov/Dec2001, Vol. 51 Issue 11/12
URLs
Philip Kotler (1988), Marketing Management: Principles and Practise, UK: Prentice Hall
