SEGA: Material 1.
dedicated for my SEGA students.

 

6 How should you promote your product?

Main points in Chapter 6
How should you promote your product?

However good the product, it is unlikely to sell itself.
Advertising and promotion are required.
The chapter discusses researching ...

• types of promotion, including advertising, point-of-sale displays, free samples and price reductions;
• promotion carried out by competitors;
• how competitors advertise their products;
• what arrangements are usually made with distributors for in-store and other promotions.

A promotional presentation, such as a point-of-sale display, will help identify your products to consumers.

PLANNING PROMOTION
You should be thinking about how to promote your product a long time before you start producing it. Your visits to shops and interviews with shopkeepers and wholesalers will give you an opportunity to find out what sort of promotion your potential competitors are doing and what sort of promotion you could organize with shopkeepers.
Types of promotion
The word “promotion” covers a range of activities to make people aware of, and want to buy, your products. Examples of techniques that are used around the world include the following:

• advertising;
• point-of-sale displays;
• free samples;
• word-of-mouth;
• coupons;
• tokens;
• special prices;
• free publicity.

Advertising. This can be on radio or television, in newspapers or magazines, on posters and billboards, or by using leaflets handed out in the street or delivered to homes. For small agroprocessors, television and national newspapers are not realistic options, but other approaches could be used. In many countries the number of rural radio stations is expanding rapidly, and these may offer the possibility of relatively low-cost advertising.

A design suitable for a poster or a leaflet hand-out can be reduced in size for a newspaper or magazine advertisement.

Point-of-sale displays. These are special displays of a product or range of products inside a shop. In addition to the products being on their usual shelves, they are displayed at other locations, often, in the case of supermarkets, near the check-out area. A printed cardboard display stand could be used, possibly with posters and banners, which can be displayed around the shop.
Free samples. This technique is particularly useful for new products. People may be reluctant to try something new when they see it in a shop, without having first tasted it. In developed markets companies often deliver small samples of their new product to every household in a country. Agroprocessors could consider handing out samples at shops for people to taste when they are going in. This would have to be done in conjunction with a good point-of-sale display.
Word-of-mouth. For small processors this can often be very effective. You can organize parties and gatherings at your home or at the homes of employees and friends, in order to taste your products. If people like them they will, in turn, tell their friends about them.
Coupons. Manufacturers sometimes include coupons on their packaging. These can be used by consumers to get a reduced price on their next purchase. Coupons can also be included on leaflets. The use of coupons does, of course, require the cooperation of shopkeepers, for whom collecting the coupons and returning them to the manufacturer for reimbursement can mean a lot of additional work.

Free samples can be an important way of drawing attention to your product.

Tokens. Another technique is to include a small token on each packet or container. When people collect a specified number of tokens they can take them to the shop or return them to the manufacturer to receive a gift. Again, such promotions often require the cooperation of the shopkeeper.
Special prices. Reducing prices can be used as a short-term promotional technique. However, it is not enough just to cut your prices and have your product on sale for less -you have to tell people you are doing so. Thus price reductions have to be used together with other promotional techniques, such as advertising, and in-store displays.
Free publicity. Local newspapers and radio stations often look for local news items. They may be very pleased to do an article about your new factory. Make sure you don’t approach the media before your product is on sale. An article in the newspaper that “Joe is going to open a juice factory in six months” will not do you much good and may alert potential competitors. An article such as “Joe’s Juices go on sale today” will, on the other hand, be valuable free publicity, particularly if you can get the reporter to name some of the shops where your product is on sale.
These are examples of promotion to consumers. However, you also need to promote your products to retailers. Perhaps the best way of doing this is to convince them that your promotion activities for consumers will result in very good sales, so they will make money by selling your products. Another way is to offer special discounts for your first sales to a particular retailer (see Chapter 8). Free samples can also be used to attract the interest of shopkeepers in stocking your products (see Box 4). Gifts, such as pens or key rings, with the name and logo of your company on them can also be used. Many countries have specialist companies that supply such gifts.

Promoting cassava chips in Tonga The author of this guide once worked in the South Pacific island nation of Tonga. An FAO project assisted with the establishment of a food processing plant that, among other processed products, developed very tasty chicken-flavoured cassava chips. Promotion on the main island of Tongatapu was carried out by visiting all of the numerous small shops or kiosks on the island to give the shopkeepers two free packs of the chips, together with a leaflet telling them where they could buy the chips in wholesale quantities, and the prices.

Most promotional activities have a cost. Smaller agroprocessors may find that they just do not have the financial resources to do many of the activities outlined above. They may have to rely on free publicity through word-of-mouth or stories in the local media. Even very large companies have to balance carefully the cost of promotion against the likely benefits in terms of increased sales at profitable prices.
What type of promotion is being done?
During your research, visit as many shops as possible, even if you do not interview all the shopkeepers. You should look closely at the techniques used for promotion by all manufacturers, particularly those who will be your competitors.
Look to see what is on display in the shops, such as:

• posters;
• leaflets;
• banners;
• point-of-sale displays;
• special price offers.

You should ask shopkeepers what types of promotion they have been involved with, and why. If small shops have one or two posters on display, for example, it would be useful to find out why they are displaying those posters in preference to others. Which promotions do shopkeepers feel to have been the most successful, and why?
Messages of your competitors’ advertisements
You need to consider not only how your competitors promote but also what features of their products they highlight in their advertisements, and which features of your product you would like to highlight. Examples of the type of language used include:

• healthy and nutritious;
• luxurious;
• smooth tasting;
• easy to use;
• full of fruit;
• 100 percent natural;
• a product for the élite;
• good or best value.

Arrangements for promotions
You need to understand the agreements made between the manufacturers and wholesalers and/or retailers. For example, if products are offered to consumers at special prices, does the manufacturer expect retailers to reduce their margins for the duration of the promotion? What conditions do larger retailers attach to the use of point-of-sale displays? What financial and other agreements need to be reached to hand out samples inside or outside shops? Is the processor expected to provide the staff to hand out the samples, or is this arranged by the store?
Your discussions with shopkeepers should be aimed not only at finding out the types of promotion that are carried out but also the likely cost of such promotions to you. For example, when special price offers are made, by how much is the price normally reduced? How long do in-store promotions with free samples usually last, and how much is it likely to cost you to provide enough samples?

A WORD OF WARNING Do not promote your product before you have sufficient quantities ready for sale. This is a common mistake of processors and it means that: 1. Consumers will be frustrated when they cannot find the product in the shop. 2. Retailers will be annoyed that they are out of stock. 3. When you do, finally, have enough to sell you will have to do more promotion.

REACHING CONCLUSIONS
Your research should have given you a good idea of the types of promotion carried out in your area both in general and for the types of product you plan to produce in particular. You can then reach conclusions such as:

• promotional activities are rare in my area. However, I shall have to do something to make sure people learn about my new yoghurt. The best method is probably to print some colourful posters, which I can ask the retailers to display;
  
• all the other carbonated drink producers do lots of advertising. To compete with them I shall have to do radio advertisements and provide banners and posters to the retailers;
  
• I cannot afford to advertise my honey. But the new FM radio station is always looking for news stories. I shall visit them with some samples of my honey and information about where people can buy it.
  
  source: http://www.fao.org/docrep/007/y4532e/y4532e08.htm