The objective of this paper is to present a plan for product promotion campaign of a new shampoo. We define the goal of this campaign at the very beginning. Then we enumerate the possible methods of achieving this goal. We present an analysis of the possible effect of the campaign in terms of pricing and distribution of the product.
Setting up the Goal
Since the product is a new shampoo the first goal will be spread awareness about the product. To make people understand the unique characteristics of this new product that makes it different from the other products. The people has to understand what they are getting from this new shampoo that they did not experience before from the type of shampoo they had been using. In planning the campaign it is very important to identify the target group. Usually a shampoo appeals to the young population than the aged. But here can be varieties of this shampoo that caters to the needs of different hair types.
Another most important goal is to affect the consumers’ utility from the consumption of the good. If a promotional campaign is effective it will make the consumers realizes that the product is unique and gives them more value than any other product. This will give them more utility per unit of the product. Thus the price will tend to rise as demand curve shifts to the right as shown in figure 1. Thus the campaign can lead to the rise in price of the product in the market.
We know that the increase in price will tend to reduce the consumption of the product and will affect the revenue earned by the firm. Our ultimate aim is to increase the earning of the firm. In such a case we have to be aware of the fact that an effective marketing campaign should decrease the price elasticity of demand. That is the campaign should increase the consumers’ preference for the good to such an extent that even an increase in price will not result in huge fall in demand. Inelastic demand implies that one percent change in price will result in less than one percent change in quantity demanded . Thus a higher price will lead to only a slight fall in demand and thus will increase the revenue of the firm. In figure 2 we can see how the total utility and marginal utility of the consumers changes due to the campaign and in figure 3 we show how the demand curve changes due to the change in elasticity brought about by the effect on utility.
Keeping the goal of affecting the utility obtained by the consumers the campaign should be concentrated more on spreading awareness and direct marketing strategies . The effect of the campaign on the consumers should be closely monitored by carefully crafted survey programs. Since the product is a shampoo and targets a wide range of population the distribution should follow an intensive method . It should be available at all stores in the region where the product has been launched. The timing of the distribution should match with the publicity awareness campaign and direct marketing campaign so that the consumers developing a preference for the product from te campaign do find the product in the store. If the campaign is successful in reducing the price elasticity of the product, the price of the shampoo can be kept high so that the earnings are high.
Figure 1
Figure 2
Figure 3
References
Boundless. (2016). Product, Placement, Promotion and Price. Retrieved March 3, 2016, from Boundless.com: https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/introduction-to-marketing-1/introduction-to-marketing-18/product-placement-promotion-and-price-108-4454/
Fleischner, M. (2016). 10 Key COmponents of a Marketing Plan. Retrieved March 3, 2016, from business know-how: http://www.businessknowhow.com/marketing/marketing-plan.htm
Pindyck, R., & Rubinfield, D. (2009). Microeconomics (7th ed.). Prentice Hall.
