Strategy, competitive advantage and the promotional mix
A Polestar Group case study

Page 3: The marketing mix

The combination of factors that influence a customer's decision to buy a product is known as the marketing mix or 4Ps:

  • Price - What does the product cost? What are the terms of payment? Is credit offered?
  • Product - What benefit does the product provide? What particular features and specifications does it have? How does it compare to competitors' products?
  • Promotion - The way in which a company communicates about its products e.g. through advertising, sales promotion or public relations.
  • Place - The way that ownership of a product passes from the manufacturer to the consumer (distribution).

Above and below the line promotion

Promotional techniques aim to communicate with the customer. They include above the line and below the line techniques. Above the line promotion involves spending on mainstream advertising such as television, radio and cinemas. The total amount of spending on above the line advertising in the UK in 2002 was nearly £11 billion; television and press advertising accounted for nearly 70% of this.

Polestar must keep aware of the trends within above the line promotion because some of its clients - such as the magazine and supplement publishers - rely on press advertising revenue for their income. If, for example, magazine advertising proves more effective for every pound spent, then advertisers will demand more pages, thus increasing Polestar's order value. This is another reason why it is important for Polestar to be innovative so that it can help its customers provide their clients with a more effective means of promotion.

 The Polestar Group is also involved in below the line promotion. These promotional methods do not involve mainstream advertising (i.e. are not above the line!). This includes:

  • direct mail
  • sales promotion
  • catalogues.

The Polestar Group's services help its customers improve their marketing mix by enabling them to promote more effectively. Polestar recognises that its customers and advertisers have limited marketing budgets and so every pound counts. Helping its customers to increase the effectiveness of their spending increases the appeal of Polestar service. Polestar can help its different customers to add value in the following ways.

Magazine publishers

The publishers of magazines are naturally eager to make their publications stand out especially when there are lots of competitors on the shelves. As customers browse in the shop Polestar can help its clients' products attract their attention by printing unusual covers such as barn door covers.

Magazines also raise revenue through their advertising and Polestar can help here by making these advertisements more effective. If advertisers get a better response rate they will be willing to pay more to advertise in a particular magazine. Examples of Polestar's creativity include the introduction of Post-it? notes inside a magazine with messages attached about particular goods or services. These have proved highly effective at drawing people's attention to advertising increasing the response rate from 1% to 3%. This is a huge increase in absolute terms given the large number of magazines that are actually published.

Direct mail

Polestar helps its customers increase their direct mail response rate by enabling them to use a personalised approach with their target market. The brochure, card or letter can be personally addressed. This can encourage recipients to read the information that has been sent. Once again such flexibility requires specialised equipment and skills. Polestar helps companies to reduce wasted mail by assisting its clients to clean up their data lists thus avoiding unnecessary duplications.

This one stop shop approach helps direct mailing companies save money because they can avoid sending the same thing twice to a household unintentionally and improve their success rate by getting more people to read whatever has been sent rather than just destroying it.

Catalogues

One of the most important aspects of catalogues is the way in which the products are displayed. Good photographs and accurate reproduction (e.g. matching colours correctly) can make a major difference to the rate of orders and level of returns. Polestar's specialist skills and technology help ensure this happens.

Publishing solutions software

Another of Polestar's strengths is its ability to use client's databases as part of the printing process, e.g. the company works with Tesco to send out information to its 10 million Clubcard holders. It organises the mailing to these loyalty card holders four times a year and using the information from Tesco, it provides information on the points earned and includes personalised vouchers and coupons.

The success to which Polestar adds value can be measured in terms of its impact on its customers' sales, revenue and brand awareness relative to the additional costs involved.

Polestar Group | Strategy, competitive advantage and the promotional mix

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