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Jennifer Quarcoopome 255254

Unit 18 Assignment 1

In this assignment I will explain the different purposes of the promotional mix for Nike and Coca cola.

What is the promotional mix?

It refers to the various promotional strategies that firms might use to reach out to their target market. It's all about adopting the most effective communication tactics to boost sales and raise awareness of the company and its products. Advertising, sales promotion, public relations, personal selling, and direct marketing are the five major tactics that businesses can utilize as part of their promotional mix.

In this section of the assignment, I will talk about how two contrasting businesses use the methods of the promotional mix.

Nike was founded on the 25th of January,1964 by Bill Bowerman. Nike is a multinational sportswear brand. They are engaged in the design, development, manufacturing and marketing of footwear, apparel, sports equipment, accessories and services.

Advertising at Nike

Advertising is when companies pay to promote their products to audiences, they think may have an interest in purchasing from them. It can be done using traditional methods of advertising such as TV, newspapers, radio and billboards or through new outlets such as social media, YouTube and Google search, Nike does a lot of to showcase what they have to offer. Nike’s advertising involves a lot of celebrity endorsement to represent the ideal customers for its products, celebrity endorsement is an effective way of advertising because it builds brand credibility. People see celebrities as role models so they want to follow their footsteps, as a result consumers will be motivated to purchase and use their products.

Examples of Nike’s celebrity endorsement

Nike also has a very strong social media presence and make most of highly targeted paid ads on platforms such as Facebook, Instagram, Twitter, Pinterest and YouTube.

Nike undertakes successful advertising because with their advertisement they are able to promote the brand to customer’s and target a large audience.

Sales promotion at Nike

Short-term incentives designed to entice customers to acquire a product or service are known as sales promotions. Special offers, such as BOGOF, discounts, and coupons, are used to promote sales. All of these deals are short-term promotions with a limited time offer, which encourages customers to act swiftly because they will miss out on the limited-time discount if they don't. Because people like to save money, doing a sales offer is a wonderful method to keep customers interested and thrilled.

Nike implements sales promotions to entice new and existing customers by offering incentives. Nike has a competitive advantage in sales promotion because it increases consumer loyalty, which leads to increased sales and revenue.

Direct marketing at Nike

This strategy requires directly addressing clients via mail, phone calls, text messages, and email. email marketing is the most current and extensively used kind of direct marketing because it allows a firm to track the performance of their campaign through open rates and link clicks.

Nike uses direct marketing to reach out to their target demographic and promote new items. Nike approaches college and university sports organisations to talk about their products, increasing consumer awareness of Nike's products. They use direct marketing to strengthen customer relationships, and they also advertise their products via email to keep customers up to date on new product releases, special offers, and CSR initiatives (Corporate social responsibility).

Public relations at Nike

Public relations (PR) is the communication and relationship a business has with the public. The image of the brand is often built through media outlets talking about the business and what the business does and stands for. This is communicated through press releases and conferences that get discussed. This is more publicity than promotion so that also means that because it’s free promotion the media might not always say positive things about the business.

With social media it's easy for them to reach their audience without an extreme amount of effort. They may easily contact their target audience using social media without putting forth a lot of effort. Coca- Cola tries to improve brand awareness, customer engagement, and brand awareness by being active on all social media platforms, but instead of making material that is primarily about a product, they make amusing content to inspire their supporters to engage with the brand.

• Print media

Coca Cola ads can be found in posters, magazines, and stickers in different stores.

TV ads are the most popular technique for Coca-Cola's advertising because they allow them to reach a large portion of the market they are targeting.

Examples of Coca Cola TV ads

(36) Coca Cola Brotherly Love tv commercial - YouTube

(36) Coke 2012 Commercial: "Catch" starring NE_Bear - YouTube

Coca Cola always ensures that their ads and branding are relevant to the current events that are happening around the world.

#Thatsgold: Coke and the 2016 Olympic games

With this ad they’ve decided to capture the spirit of the games and celebrate the sense of accomplishment people feel when they achieve their goals. All Coca Cola ads are always associated to the feeling of happiness. This is a great way for Coca Cola to market their products because customers will always look at Coca Cola as a positive and optimistic brand.

Sales promotion at Coca cola

Coca Cola does sales promotion in two different ways to rapidly increase sales.

purchasing habits. Essentials such as bread, milk, and toothpaste are examples of mass market products. A niche market , on the other hand, is a product or service that caters to a specialized demographic, customers who shop in a niche market are drawn to something different than the mainstream, so a niche market business must choose a method of promotion that makes the customer feel special. For example, with personal selling, the salesperson will not only be able to sell their products directly to the customer, but they will also be able to build a strong relationship with the consumer.

PROS & CONS of operating in a Mass market

The size of the market is large, leaving substantial space for business growth as the larger portion of the population is a potential customer. In a mass market there is also higher economics of scale giving customers lower prices. With a mass market there is also widespread availability meaning there is a higher opportunity for the product to be discovered or repurchased by the customer as they see the product on a regular basis. On the other hand, operating in a mass market means that the organisation has lower profit margins so they must rely on making lots of sales to make a profit also, the products in the mass market are standardized so this means there is less of a variety. Finally, competition is extremely high because many companies are present in the market.

PROS & CONS of operating in a Niche market

There are better profit margins as the product meets the specific needs of the customer and the features are hard to find in other company’s products so they can charge premium prices. With niche products there is also an increase in customer loyalty as the brand is perceived to be unique so people will keep shopping from them because it’s hard for them to find alternatives, this also results in less competition. However, some disadvantages of operating in a niche market are that there is a smaller market to sell the products to as it’s extremely specific. With a niche product there is also lower economies of scale because the market has fewer customers.

Coca-Cola is a mass market company, which means that its products are aimed at a big audience. This means that in order to reach all of these customers, they will need to use mass media advertising. TV commercials, billboards, and public relations are the most effective promotional strategies for mass media advertising.

Nike operates in both niche and mass markets. Niche because they produce products that meet the characteristics of a specific demographic for example, Nike launches products like gold kits and gold equipment. These products are not for everyone’s taste so for these type of products Nike needs to do more targeted advertising (e., email marketing). Overall, Nike mostly operates in the mass market because they have a wide range of products and services that target a large segment of the population worldwide. To advertise those, they will often design effective promotional campaigns and use social media to attract the audience.

Organisational strategies

Organisational strategies such as the push and pull strategy have a massive impact on the choice of promotion a business decides to use.

A push strategy is almost as if a brand is forcing a customer to buy their product. A push strategy uses a company’s sales force to create customer demand for a product

A pull strategy is when a business makes a customer come to the brand and demand for the product without the business having to directly impact their decision.

Because both Nike and Coca Cola are big businesses, they mainly use the pull strategy to promote their products. This is because they have a large customer base so it would take too long for them to interact directly with each customer using a push strategy. This means that Nike and Coca Cola focus on mass advertisement, referrals, PR and social media presence. However, I am convinced that at the start when these businesses where founded they used a push strategy because at the time, they weren’t recognisable brands, this means that they would mostly focus on persuading retailers to sell their products, personal selling, tradeshows and point of sales (POS).

PROS & CONS of the pull strategy

The benefits of a pull strategy include that there is strong demand for a product since consumers are actively looking for it, this removes the strain of excessive promotion. A pull technique can also be used to assess market acceptance and collect feedback on a product. It is, however, only effective when there is a significant level of brand loyalty. Another downside is that in a highly competitive market, it might be difficult to generate significant demand for a product.

PROS & CONS of the push strategy

The advantages of a push strategy are that it’s quite easy to develop and it’s cost effective because not a lot of promotional equipment is needed. Also, results can be seen in a short period of time if done effectively, this means that sales can be boosted rapidly. Some disadvantages of a pull strategy are that It doesn’t create customer loyalty because the customer doesn’t come to the brand, but the brand is convincing the customer to come to them. The final disadvantage is that the promotion must be repeated frequently.

Ethical issues and promotional activities

Business ethics are the standards and practices in the workplace when they are undertaking business activities. Business ethics includes societal standards of right and wrong, ethical standards and circumstances and legal standards. In order for businesses to succeed and look good in the eyes of the public they need to ensure that their promotional activities are ethical and that don’t cause compromises or misunderstandings.

Example of unethical promotion

At the beginning of April 2002 Starbucks created a promotional poster for their coffee company.

that is found outside from outside the organisation for example, government publications, websites, competitor reports, newspapers and commercial publications. Secondary research is essential for business promotion because it is less time-consuming as the information is already provided.

Doing market research prevents businesses from creating misleading information. However, there have been times when Nike has been accused of false advertising. The company was accused of selling trainers in China that didn’t have the <Zoom air= feature advertised on TV. This affected their promotional activity negatively as Chinese customers lost trust in the company.

Coca Cola has also been sued for false advertising over sustainability claims. This is because according to the lawsuit Coca Cola is the world’s leading producer of plastic waste, but they are marketing themselves as an environmentally friendly brand when it’s clear that they are not.

Overall, market research is a big influence on the promotional activities of Nike and Coca Cola because it allows them to gain a better perspective of the market, they are in to ensure they stay at a competitive advantage. However, for some businesses market research is a turn-off due to the amount of money that needs to be invested to be carried out.

Legal issues

Legal issues relating to promotional methods refer to advertising under legal legislations when carrying out promotional activities' businesses need to ensure that they take into consideration the laws that prohibit them from utilising particular types of promotion on the target demographic when they advertise.

A set of written standards that specifies how people in a certain field should conduct is known as an industry code of practice. Nike was fined £10 million by the European Union for breaching the competition regulation governing the sale of football merchandise. This had an impact on their marketing efforts because it reduced the number of people they could sell and advertise their products to.

Organisational influences

Organisational influences are the characteristics of an organisation that has an impact on business activities. An example of an organisational influence is resource management which is whether a business has enough resources to carry out their promotional activities. Availability of finance is an example of a resource that a business needs to have to undertake promotional activities. Large companies spend a lot of money to promote their products and services, but most small businesses have limited resources and can only advertise at particular periods of the year.

Nike and Coca Cola are both large businesses and therefore they have enough funds to create high quality promotional content and stand out from the market.

Political influences

Government restrictions and legislations are one aspect that determines Nike's promotional activity selection. The CAN SPAM legislation, implemented in 2003, has several rules controlling the use of commercial messages because it implies that customers must provide authorization to receive emails

and notifications from a company. This has an influence on Nike promotional activity as it slows down the rate of communication between Nike and its customers as many existing consumers no longer want to receive emails, resulting in a loss of customer retention as they'll be unaware of Nike's special offerings.

As a result, Nike may decide to spend less time on direct marketing and more time on promotional strategies that are not constrained by rules.

Social factors

Social factors are all things that affect the buying habits and spending of customers. These include changes in demographics, such as birth rate, life expectancy and levels of immigration. Knowing about the demographics of your target market is beneficial because it allows the business to know in detail all the characteristics that affect their buying decisions. Knowing demographics will also allow Nike and Coca Cola to psychologically attract new customers through advertising.

Competitive pressures

Both Nike and Coca Cola are still at a competitive advantage as Coca Cola’s market share has increased to 42%, which puts them ahead of their rivals like Pepsi. Nike currently is the leading sportswear brand with a market share of 27%. This shows that both Coca Cola and Nike have been promoting their products effectively and need to keep going if they want to stay in the lead.

Internal factors include:

• Nature of product

External factors include:

• Competitors
• Demographics
• Legislation

An internal factor that affects a business’ promotional activity is the Nature of the product. Depending on the type of product the business wants to promote, each product requires different tools of promotion. For example, if a business is selling industrial goods like plants and machinery personal selling is the most effective promotional activity because the customers of industrial products are quite limited it allows the person to talk in detail about the product and its benefits. On the other hand, if another organisation is selling low-priced goods such as beauty and skin care, advertising and publicity is most effective. For businesses like Apple due to the fact that they sell tech products, personal selling would be more effective as their products are quite complex, technical and newly developed so they need more personal explanation and observation. On the other hand, advertising is more suitable for simple and easy handled products like Coca Cola. Another internal factor is the business’ budget. A budget is an estimation of revenue and expenses over a specified period of time. One of the most important things that influences all promotional actions is

guidelines for collection and processing of personal information. This affects promotional activities because it means that businesses need to ensure that when doing any kind of promotion that requires customers to give out their personal information such as email marketing, they need to ensure that they don’t misuse that information. Another legislation is the Consumer protection from unfair trading regulations in 2008 . This law states that a business can’t use adverts to mislead or harass customers, examples might include adverts that send a false message across or use aggressive promotional techniques.

New legislation drastically effect marketing activities so sometimes businesses must change their promotional plan to remain compliant.

Throughout this assignment we’ve looked at two very different businesses, Apple and Coca Cola, and we’ve realised that different promotional activities affect businesses in a different way. So, depending on what market the business operates in there are some promotional activities that work better in one specific market than the other. For example, for tech and food companies like Apple and Coca Cola the most effective kinds of promotional activities are the ones that target a large audience in a short amount of time such as advertising through TV ads and public relations. On the other hand, for businesses that operate on a niche market such as funeral care businesses it would be best to use a promotional activity that specifically targets those kinds of people but rather than doing it in a generic manner, they need to do it in a personalised way to make their target market feel special and cared for. So, for these kinds of businesses direct marketing and personal selling is quite common.

The choice of promotional activities is also based on the circumstances the business is in. For example, if the business has a low budget, they will most definitely choose a promotional activity that’s cheaper however, if the business has a high budget, they will choose one that’s more expensive and will allow the business to achieve its aims and objectives quicker.

Usually, when talking about business promotion big firms are willing to invest a lot in promotion because they know that by doing so there is a potential of receiving a big return on investment.

In conclusion, promotional activities are affected by a lot of internal and external factors and it’s up to the business to choose which activities will benefit them the most and increase their revenue.

References:

How Coca-cola Attracts Customers with Promotional Gifts? (theodmgroup).

Coca-Cola Advertising Campaigns, Print Advertisements and Commercials (designyourway)

Nike Advertising | Techniques used by Nike in Advertising | Marketing

Promotional Strategy of Nike (thestrategywatch)

Coca-Cola Sued for False Advertising Over Sustainability Claims (earthisland)

UK Laws on Marketing and Advertising | Direct Marketing Rules (theukrules.co)

Consumer Protection from Unfair Trading Regulations - businesses: OFT979 - GOV (gov)

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Module : Pearson BTEC Level 3 National Extended Diploma in business (22P1BUS00330)

University : nottingham college.

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