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Problem Solving II Promotion Strategy

Problem Solving II Promotion Strategy. Presented By Group B. Version Final 02. Group B Member list. Carmen Mai Nicole But Angus Leung Thomas Leung. Introduction. Company background Established in 2002 with its sole business in Speech recognition software Financial status

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Problem Solving II Promotion Strategy

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  1. Problem Solving II Promotion Strategy Presented By Group B Version Final 02

  2. Group B Member list Carmen Mai Nicole But Angus Leung Thomas Leung

  3. Introduction Company background Established in 2002 with its sole business in Speech recognition software Financial status Sales in Hong Kong and China is around $50M per annual

  4. Introduction Marketing Issue No competing firm able to offer grammar checking feature Promotional campaign help to improve profitability Launch different promotional activities in Hong Kong and China in order to boost up these sales revenue

  5. Presentation Outline • Approach to determine the promotion budget • Promotional activities and budgeting in Hong Kong • Promotional activities and budgeting in China

  6. How to set Budget for that Campaign? Objective and Task Approach Increase total revenue by 30% (from $50M to $65M) Increase the revenue in China by 150% (from $5M to $12.5M) Launch different promotional activities in Hong Kong and China in order to boost up these sales revenue

  7. Market Segmentation Geographical Segmentation • Hong Kong Market • Hong Kong Island, Kowloon and New Territories • Maintain the existing market share and expect a steady and progressive sales growth. 2. China Market • Guangzhou, Beijing, Shanghai and Shenzhen • In view of its big potential market and attractive sales growth, much efforts and promotional amount will be spent.

  8. Market Segmentation Units/$ Decline Introduction Growth Sales Profits Time Losses Product Life Cycle of Software Mature HK Market China Market

  9. Promotion Plan in Hong Kong Background • Sales Distribution in Hong Kong Market Hong Kong Island 40% Kowloon 30% NT 20% • Main Focus of Promotional Activities • Advertising • Sales promotion

  10. Advertising Advertising is a paid form of non-personal communications about an organization, its products, or its activities that is transmitted through a mass medium to target audience.

  11. Advertising • MTR Escalator Crown - $140K Advantages: • Enhance product and brand awareness • Message can effectively reach target customers Advertising near point of sale (2 stations) a. Wan Chai b. Sham Shui Po No. of panel: 24 Production cost: $5K Rent: $20K per month for Wan Chai $25K per month for Sham Shui Po Duration: 3 months

  12. Advertising M-Channel in bus - $130K Advantages: • Wide territorial coverage • Repetitive messages can easily arouse passengers’ attention, thus establishing brand image No. of buses involved: 800 Broadcast cost: $20K per month Production cost: $10K Duration: 6 months

  13. Advertising Internet - $150K • Internet advertising - $50K Advantages: 1. Access to customers easily 2. Consistently match product’s characteristic – software 3. Easily reach the target customers b. Set up a homepage – $100K Advantages: 1. Buyers often visit web site when in “purchase corridor”, encourage purchase in the web 2. Effective mean to provide product and application information 3. Easily build up a profile of potential and existing customers

  14. Advertising Computer Magazine: PC weekly - $300K Advantages: • Effective to reach target customers • Create brand image Advertising cost: 50Kper month Duration: 6 months

  15. Advertising Poster for retailers - $20K Advantages: • Efficiency in reaching potential buyers • Effective communication messages to potential buyers • Stimulate purchase at retail shop No. of copy: 1000 Printing cost: $20K

  16. Sales Promotion A direct inducement, offering added value or incentive for the product, to resellers, salespersons, or consumers

  17. Sales Promotion Exhitbition-$85K Advantage: • Target potential user • Create image of brand a. Book Fair - $40K Rent-$15K, labor-$15K, setup-$10K b. Computer Expo - $40K Rent-$15K, labor-$15K, setup-$10K c. 8 Universities - $10K Labor-$5K , setup-$5K

  18. Sales Promotion Special Discount - $20K • Offer 20% off for first 500 buyers in 2003 Advantages: 1. Short term price reduction to stimulate demand and sales 2. Effective in changing customers’ short term buying behavior Cost: $ 20K Time to start: January Target no.: 500 buyers

  19. Sales Promotion Point of purchase in computer centre - $80K • Advantages 1. Stimulate immediate purchase from potential customers 2. Effective to demonstrate product’s strength, enhancing the persuasive power 3. Allow customers to try and experience the product before their purchase, strengthening customer’s confidence toward the product and reducing post-purchase anxiety • Computer Centre a. Wan Chai b. Sham Shui Po Rent: $10K per month Promoter: $10K per month Duration: 4 months

  20. Direct Marketing Rationale for no spending on Direct Marketing 1. Costly to manage and maintain an update client base by direct marketing 2. Relatively low response rate 3. Cost per potential buyer is high

  21. Public Relations Reasons for no spending on Public Relations 1. Return on investment is low 2. Little control over message 3. Media may not cooperate

  22. Personal Selling Reasons for no effort on Personal Selling 1. Cost per contact is high 2. Salesperson are hard to recruit and motivate 3. Presentation skills may vary among salesperson

  23. Promotion in Hong Kong:Scheduling and Budgeting Total budget: $930K

  24. Promotion Plan in China Background • Sales Distribution China - 10% • Main Focus of Promotional Activities • Advertising • Sales promotion • Personal selling

  25. Personal Selling Increase the sales force – $700K • Total staff being employed: 40 Advantages: 1. Salesperson is persuasive and influential enough to encourage customers’ purchase 2. Two way communication between company and buyers 3. Target specific buyer • Guangzhou 8 staff $150K • Beijing 12 staff $200K • Shanghai 12 staff $200K • Shenzhen 8 staff $150K

  26. Sales Promotion Offer Discount for OEM Product - $1000K • Offer 40% Discount for OEM Advantages: 1. Short term price reduction to stimulate demand 2. Contribute to large volume growth OEM contribute 30% of sales in China Sales in 2002: $1500K Expect sales in 2003: $3000K

  27. Sales Promotion Lucky draw - $100K • Offer 500 free software for luck draw Advantages: 1. Increase the awareness of potential buyer to our product 2. Stimulate demand 3. Effective tool to develop positive word of mouth

  28. Sales Promotion Exhibition - $80K Advantages: • Target potential user • Create brand image • Product information • Face-to-face communication and interaction with potential customers Participate in 2 Computer Expo - $40K Rent-$15K, labor-$15K, setup-$10K

  29. Advertising Internet - $50K • Advertising in internet - $50K • Advantage • Click-through rates and coverage easily tracked Computer Magazine - $750K • Advertising in 4 Computer Magazine • Advantages: • Efficiency in reaching potential buyers • Create image of brand Advertising cost: $150K per month Time: 5 months

  30. Promotion in China:Scheduling and Budgeting Total budget: $2,680K

  31. Conclusion Total Budget 1. Hong Kong: $930K 2. China: $2,680K Total Budget: $3,610K

  32. THE END

  33. Question and Answer

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