There are several methods for conducting promotional marketing analysis. The techniques you use are largely contingent upon the types of promotions and advertising you run. The goal of any company is to earn profits, and businesses generally speaking increase sales with promotions and advertisements -- for the sake of marketing analysis, advertising is part of promotions. To maximize your marketing dollars, you'll want to have a system in place to measure all promotions and advertisements. The first step in promotional marketing analysis will be calculating the total expenditures for each campaign. Subsequently, you will need to evaluate the amount of revenue generated by each promotion. This way you'll find out each marketing method's ROI, or return on investment.
Ad or Promotional Awareness
A common promotional analysis measurement is advertising or promotional awareness. Whether you are using a specific in-store promotion or TV advertisement, you can track consumer awareness of your campaign. The best way to track ad or promotional awareness is to conduct phone surveys among people in your market area. For example, if you run a local beauty salon, you may speak to people who leave within five to 10 miles of your location. Use the phone book to call people randomly in certain prefixes, which are typically assigned by area. A sample size of 300 or more should give you a good read on the percentage of people aware of your specific promotion or ad. Ask people which types of advertisements or promotions they are familiar with in your industry. For example, if half the people in the survey are familiar with your advertising or promotion, your awareness level is 50 percent.
Another quick type of promotional marketing analysis is under-price analysis. Under-price analysis is determining whether you took in more during a promotion than you spend. Hence, you take the revenue earned from the promotion or ad and subtract the cost of the advertising. The difference is the profit. Thus, if you earned more than the price of the promotion or ad, you earned a profit from it. Promotional costs are usually fairly easy to calculate. You may even have the receipt for a particular ad. However, sales attributable to ads are more difficult to track, especially sales generated from TV, radio or Internet advertising. One way to track sales is to ask respondents where they heard about your promotion. Subsequently, take down the person's name and later determine if they buy from you. This type of sales tracking works best with smaller companies. Another method for tracking sales is by using flag words, according to Entrepreneur.com. A flag word can be a simple phrase people say when asking for the sale price on an item. For example, customers may say, "I want the "Big Spotlight Two for One Special." This is the name you assigned the product in the ad in the daily newspaper; whereas you would name the product differently on your radio or TV ads.
Cost Per Inquiry or Order
There are two types of measurements that can further measure the effectiveness of your promotions: Cost per inquiry and cost per order. Cost per inquiry is the amount you spend for each person who inquired about your ad. For example, if you spent $1,000 on an ad or promotion and received 50 calls or written inquiries, your cost per inquiry is 20. Cost per inquiry or CPI will help you determine how much it costs to acquire an interested prospect. However, the cost per order or CPO will help you determine how much you need to spend for each order. Thus, the same $1,000 promotion may have elicited only five orders. Therefore, your cost per order was $200. Compare your CPI and CPO among different advertising mediums. Those requiring the lowest CPI or CPO are going to be your most cost-effective mediums.
Tagline recall pertains to people's ability to recall your ad or promotional slogan. Companies often use this type of promotional or advertising analysis with television campaigns. For example, you may be running a television commercial that ties a movie promotion in with your advertising. You may want to know the percentage of people who recall your particular tagline or slogan. Additionally, you may want to know what percentage of people can recall what promotional items you are offering. Phone surveys are the best way to determine the recall of advertising taglines. Obtain a representative sample from each market, randomly calling every fourth person on the list, for example. Hire a marketing research agency if you sell to a more regional or national market. They have the personnel and resources to better collect the data.
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