In every organisation, there are some key management decisions about marketing, which play a pivotal role in determining the performance of an organisation. Managers have the ability to control these variables in their attempt to maximize the satisfaction level of their customers.
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These include the product, price, distribution and management. These variables are referred to as management mix. When combined in the right manner, these management mix variables contribute in improving the performance of an organisation.
To Gloria Jean’s coffees, promotion as a marketing strategy has significantly contributed to the company’s success. Gloria Jean’s coffees started as a family coffee shop near Chicago, United States, almost thirty years ago. Currently, Gloria Jean’s coffee has been ranked as the second largest coffee retailer in the world (Becatti, 2007).
Furthermore, the organisation has opened eight hundred stores all over the world. Gloria Jean’s coffee is the market leader in several countries. For instance, the company has dominated the market in Australia.
The company has been attracting cooperation of other companies due to its well developed reputation. For instance, the company joined hands with hospitality major Citymax India to launch a chain of coffee house across India in early 2008 (Rao, 2009).
Up to date, the company has been expanding. One strategy that has contributed to this rapid expansion is promotion. Recently, the company has opened a shop in South Africa. According to Becatti (2007), the company has recorded a rate of growth of between 35 and 45 percent since its establishment in February 2007.
In order to protect its market, the company should effectively apply promotion as a marketing policy mix. This will enable the company to maintain high level of sales.
As already noted, promotion is one of the main marketing mix variables used in maximizing the level of customer satisfaction. The promotion process involves selling the company’s product to the potential consumers.
Promotion tools used by Gloria Jean’s Coffees
As already noted, Gloria Jean’s Coffees is one of the most successful coffee franchises in the world. The company has recorded a high rate of expansion and growth which has been the main factors which have contributed to its growth. The company’s success can be attributed to its well structured promotion strategy that is part of its marketing mix. The company uses several methods of promotion.
These include advertising, public relations, personal selling, media, and messages. Gloria Jean’s Coffees supplies each of its market with adequate marketing tools, a factor which has significantly contributed to its success (Gloria Jean’s Coffees, 2011). The company has applied intensively best practices in promotions as well as images in its effort to deliver in the markets its core values which involves adaptation to the local tastes
In advertising, Gloria Jean’s Coffees Company uses several types of media to pass information to the potential customers. In most cases, the company benefits from this method when it opens a new shop in a certain region. The company applies variety of media including print, broadcast and display media.
Television is one of the frequently used media by the company. One of the main advantages of using television is because it helps the company to reach a greater number of its target audience. Therefore, this media lowers the promotion cost per head. Through this method of advertisement, the company has managed to build its brand in the new market. This method has yielded good returns through increased sales revenue.
Another method of advertisement which has been applied by the Gloria Jean’s Coffees Company is the display media. This method has also significantly contributed in increasing sales of the organisation.
Through the display media, the company uses attractive pictures which easily draw the attention of the targeted audience in the market. Consequently, the company manages to pass information more easily to the group. One major advantage of this medium of advertisement is that it is more cost effective. It does not require large sums of money like in the case of television.
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Advertisement as a method of promotion is associated with a number of advantages. To start with, advertisement is effective in reaching a wide range of audience (Trehan, M and Trehan, R., 2009).This is more so when advertising is conducted through a media which reaches a large number of people. The method will reach greater number of people compared to other methods like the sales promotion.
Another advantage of this method is that it is most effective in creating awareness. When the audience views a certain advert on television regularly, this increases their awareness of the product in the market. This builds their curiosity to try the new product. This significantly helps in increasing sales. Again, advertising helps in building customer trust through repetition of the main brand and product.
Despite these achievements of advertising as a method of promotion, it suffers some limitations. To start with, it is impersonal and, therefore, it becomes impossible to answer the customer’s questions (Lamb, 2009). However, when a product is introduced in a new market, customers usually have some questions about the product.
By using this method in promotion, Gloria Jean’s Coffees is limited in interacting with the customers effectively. For instance, the company sometimes needs to learn about the customers’ tastes and preferences. In this method of promotion, it becomes difficult to pick views from the potential customers. This may limit the success of promotion to some extent.
When used on its own, this method is not effective in making the customer to make their final decisions in purchasing the product. In other words, this method is not solely reliable in convincing the customers to purchase the product.
Sales promotion is another method which the company has employed in promotion. Sales promotion has also significantly helped the organisation to boost sales volume. In addition, sales promotion has been of great importance in creating consumer awareness. Through promotion, the company has managed to make their potential customers aware of the product in the market.
This method has been of great importance when the company is venturing into new markets. As already noted, the company has been growing at a very high rate. For instance, it has opened a new shop at Johannesburg. In such a region, most of the people may not be aware of the company’s product.
In this case, it becomes very difficult to sell the product in such market. However, the company has managed to bring awareness to the potential customers through sales promotion. This attracts customers hence increasing the level of sales.
One advantage of using sales promotion is that it can stimulate quick increases in sales by targeting promotional incentives on particular products. These can significantly help in improving the performance of the organisation in the short run. This method has helped Gloria Jean’s Coffees in increasing the sales in their market networks.
However, this method of promotion suffers from the fact that excessive promotion can be dangerous. For instance, customers may get used to the effect in the long-run. Again, promotion can also be harmful on the fact that it may damage the image of the brand (Trehan, M and Trehan, R., 2009).
This is a process where the sellers engage in oral communication with the potential buyers with an aim of making a sale. This method has significantly helped Gloria Jean’s Coffees increasing the level of sales. Through this method, the company manages to convince potential customers to consume its products. This helps in winning consumers from the competitors in the coffee market.
One advantage of this method is that it is interactive and, therefore, possible to get the feedback from the customers on their views on the product. This helps the company in analyzing the tastes of consumers in a certain region. Through this method, the company manages to pass important details about its product to its customers.
This method, however, suffers from the limitation that it is not possible to reach a very large number of people. Therefore, it proves impotent in some cases whereto the market is too big. This method is also costly as it requires the organisation to hire more sales force which comes along with hidden costs. This has negatively affected the productivity of the organisation.
According to Pezzullo (1998), public relations play an important role in helping an organisation and its public in adapting mutually to each other. Gloria Jean’s Coffees Company has used public relations in increasing its sales.
The company uses this method by creating a good image in the eyes of the public through media hence encouraging positive commentary from them. This significantly contributes in promoting the company products in a certain market.
One advantage of this method is that is possible to reach a large number of customers (Tutor2, 2011). This reduces the average costs of marketing the product. The message sent through public relations seems more credible as they are viewed as coming from different parties (Tutor2, 2011). This improves on the effectiveness in enticing consumers to buy the product.
Public relations tools like magazines and newspapers have been of great importance to Gloria Jean’s Coffees Company while venturing in markets all over the world where the company is not widely known. In such areas, the company uses the local media in building its credibility.
This method suffers from the fact that the company may lose control. For instance, Gloria Jean’s Coffees Company cannot convince all the people what to say or write about them.
Importance of promotion as a policy mix
In every organisation, promotion is a very important practice in determining the success of an organisation. This is because the level of sales which a company makes is determined by the effectiveness of its promotional process. Therefore, it is necessary for organizations to invest in promotional activities.
In the current business world, many consumers have developed a culture of looking for the promotions before purchasing (Anonymous, 1999). Therefore, it is important to conduct promotion in order to attract such kinds of consumers in an organisation.
Another importance of promotion to the organisation is provision an extra incentive to purchase. For instance, by providing promotions to the consumers, it gives them a chance to realize the quality of the product. This can significantly help in attracting potential customers to start consuming the product.
Another importance of promotion to Gloria Jean’s Coffees Company is that the process has led to an increase in impulse buying.
When the company engages in promotional activities, some customers are enticed to buy even without the plans to do so. In the process, the organisation manages to increase the level of its sales significantly. The promotional practices also create excitement among the employees. This further provides an incentive to buy more of the company’s products.
Promotion as one of the marketing mix plays a very important role every organisation. In the current business world, the market has become very competitive than any other time. Consumer expectations have also significantly changed. This situation has increased the need to have a clear promotion strategy. To Gloria Jeans Coffee’s, promotion has contributed to the success of the organisation in various ways.
For instance, the company’s growth is expected to be about 20 per cent as a result of the extended promotional strategy. Through promotional activities, the company has reduced any confusion to the consumer in the oversaturated market where the communities are very common to each other.
According to Gersowky, the word of mouth has significantly promoted the company’s products through the promotion activities. This has contributed in building the brand which promotes the level of sales.
In its effort to venture into new markets, the company is forced to launch its new products. In this process, the company has to create awareness of the different product offerings so that the customer can be informed about the products while purchasing.
Some limitations of promotion to the organisation
Despite these achievements related to the promotional activities at Gloria Jean’s Coffees, the company has faced several limitations from these activities.
One of the main reverse effects of promotion activities is that some consumers may just sit back and wait for the incentives. In such cases, the organisation fails to realize the desired aims of promotional activities. This implies that the company does not compensate for the funds spent in providing incentives to such consumers.
In executing promotion as a marketing mix, the company incurs some costs. This has significantly reduced the profit margins of the company. Again, customers may tend to stock up during the promotion process which reduces the level of sales significantly. In this case, the promotional activities bring about reverse effects. When this happens, the promotional exercise fails as it will lead to losses.
In conclusion, this discussion has clearly shown that promotion has played a pivotal role at Gloria Jean’s Coffees Company. Promotion is significant as it has helped the organisation in selling its products to its potential customers. Without promotion, very few people will be aware of a particular product which is provided by an organisation in the market.
In other words, promotion has helped the company in informing its potential customers on the presence of its product in the market. As we have already seen, Gloria Jean’s Coffees company has managed to spread its stores across the world through its ability to spread its promotional activities, a factor which has led to high level of sales.
Promotion practices have also helped the organisation in enticing the customers to purchase its products. This is more so in the current market world which is characterized by a very high level of competition.
The major concern of any business is to maximize its profits. The main way through which a business can increase its profits is by maximizing its level of sales. If an organisation cannot manage to sell what it produces, then it cannot be able to make maximum sales.
As already seen, the best way through which an organisation can do this is through promotion. Therefore, promotion as a marketing mix tool has significantly contributed in improving the profitability of Gloria Jean’s Coffees.
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