Question

Select two firms that offer sales promotions through social media. These could include any of the strategies discussed in Chapter 8 and 13 of the textbook - coupons, rebates, contests, or sweepstakes. Using these two examples, please answer the following 1. Describe, in detail, which sales promotions the firm offers and which social media platform they utilize for the sales promotion 2. in your opinion, which firm is doing a better job using social media to enhance its sales promotions? Why? Please provide a comprehensive explanation using material from the chapter to support your opinion. 3. Who are the target markets for these social media sales promotions? Are the sales promotions an effective way to generate additional sales and profits from these target markets? Explain your answer (Please provide a comprehensive explanation using material from the chapter to support your opinion. 4. Provide at least 2 specific recommendations for sales promotion strategies that each of these firms can implement through social media. Be sure to discuss why you think your recommendation would succeed in generating additional sales and profits from the firm's target markets.

Answer 1

Firms chosen- Domino's Pizza and American Trench

Ans 1

Both use the coupons strategy. Coupons are advertised on a variety of social media platforms like facebook, twitter, dealcatcher etc. The promotion mechanism is pretty straightforward. Discounts are offered on the purchase prices of services/products to lure buyers.

Ans 2

Considering coupons are a way of increasing sales through product trial and repurchase, I feel dominos is doing a better job. The main reason is the difference between industry types (dominos is fast food-based and American trench is Apparel based) and product portfolios, details, specialization and requirement levels. E.g. Domino's Pizzas are consumed more often than trench coats! And while people (per head) may have two/three pizzas per week, how many trench coats do they try, buy and re-buy over time (weeks, months, years)? Perhaps comparing statistics like the ratio of the rise in sales revenue to the expense of coupon marketing may yield a better relative understanding. But then again, such metrics aren't openly accessible...

Ans 3

The target market for dominos is the lower-middle-class/middle-class income group looking for “quick and easy”, “delivered at home”, meal options. Coupons do seem effective, by and large, as many avail them via social media sites. A pizza, frankly speaking, suits any occasion! Even so, excessive coupon-based promotions may generate perceptions of poor quality products among consumers - which is something that firms should beware of. Perhaps this is why Domino's promotions always stress the supreme quality and freshness of their ingredients.

The target market for American Trench is comprised of high-income-class, elite, actively engaged, and working consumers. There's competition from other eminent brands as well. Coupons involving lucrative rebates may well beat the competition and also attract many from the lower strata of society .... yet ... while promotions may encourage the first purchase it is rather dubious whether future buys will follow. The pricing factor is the main issue.

Ans 4

Domino's, in my opinion, seems to be doing well already. My recommendation, in light of the discussion above, would be-

1. Domino's should keep emphasising the supreme quality of its product
2. Optimise coupon marketing expenditures by leveraging IT solutions (to determine appropriate promotions, and the right places and people to promote to)

To American Trench, I'd suggest-

1. Optimise coupon marketing expenditures by leveraging IT solutions
2. Create promotions that motivate trust