CASE#4-24788888

1

Land and Nature Jerky Analysis

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Land and Nature Jerky Analysis

1. Trade promotion in 2018

The ratio of revenue to cost=$1304,265$280487

=5:1

Consumer Promotion in 2018

The ratio of revenue to cost =$1340104

=4:1

Based on the ratio of trade promotion and consumer promotion in 2018, the data depicts that the trade promotion is more profitable than the consumer promotion under the industry average. On the data provided in the computation, the ratio of the revenue to cost on the trade promotion is 5:1 showing that the revenue earned per the cost incurred in the promotion is higher; hence the profitability of the organization Is earned. On the other hand, the ratio in 2018 on the consumer promotion on revenue to cost ratio is 4:1 showing that more revenue is earned per cost of the promotion. The trade promotion earns more revenues than the consumer promotion in comparing the promotions. According to the industry averages, the more the company attempt to create awareness of the products to consumers, the more it is likely to make more revenues in trade promotion than in consumer promotion.

The increase in the consumer and trade promotions, respectively, could result in more profits that would necessitate the company to save more from paid and owned media budget to promotions in 2018. The company's intention to invest more in consumer promotion than trade promotion would raise its profitability; hence, it is necessary to have the industry averages to determine the best strategy to apply. Land and Nature should invest more in the trade promotion as anticipated in the 2018 computation of ratio, and the company has higher chances of incurring more revenues. The trade promotion aims to push the marketing communication to motivate the retailers and maintain distribution relationships and loyalty to maintain the supplier relationship. The marketing expenses incurred on the trade promotion are less than consumer promotion in consideration of the industry averages hence a company that attempts to use the trade promotion has higher chances of earning more revenues.

2. Return on marketing investment

Return on marketing investment on trade promotion

In 2018

ROMI= (Incremental gross profit earned-cost of marketing investment))

ROMI= ($1304,265-$280,487)($280487)

=3.65

In 2019

ROMI= ($1368495-$294300)

=3.65

Return on marketing investment on consumer promotion

ROMI= (Incremental gross profit earned-cost of marketing investment))

In 2018

ROMI= ($1340104-$367152) ($367152)

= 2.65

In 2019

ROMI = ($1406710-$385400)

= 2.65

3. Trade Promotion Results

The return on marketing investment on trade promotion is 2.65 in 2018 and 2019. The strategies used by the land and Nature investment include using value-added bonuses. The bonuses provided o the traders enhance the continued product loyalty and a suitable relationship between the retailers and business results in suitable revenue accumulation. In both 2018 and 2019, the return on marketing investment is fixed due to continued bonuses to the distributors to create a good relationship with the customers. The provision of bonuses to the customers results in an improved customer base, resulting in high loyalty that attracts more customers for the product. The consumers being attracted results in higher revenues which are essential for reducing the marketing cost that increases the returns on marketing investment. The provision of the value-added bonuses results in the accumulated estimation of the return on marketing investment for the year 2020.

Offering discounts through price reduction results in more customer attraction to the traded products. The consumer has the legit need to have the products that if can afford. The company's continuous progress to using the price reduction and discount strategy improves the trade promotion technique, resulting in a maintained return on marketing investment. Discounted products have a higher rate of supplies and sales, resulting in more customer attraction and retention, resulting in increased revenue and low cost of marketing. The maintained return on marketing on investment is due to the continued progress of maintaining the customer's loyalty by proving them with the necessities to create loyalty for the products and awareness. Since the values provided in the records show that the trade promotion has been incurring the same value of return on marketing investment, the company must focus on adding more bonuses to customers to maintain the ROMI in the year 2020 or increase. Thee continue progress of the company to offer bonuses to the retailers and distributors, helps in retaining customers and results in more supplies and improved product awareness.

Consumer Promotion Results

The use of digital coupons of buy one get one free is one of the strategies used to enhance customer promotion in the company. The digital coupons are used to retain customers by attracting more new customers to try new products. The attraction of new customers results to return on marketing investment be higher. Based on the customer promotion technique used, the technique earned a 2.65 return on marketing investment ton both 2018 and 2019. The need to have a strategy that encourages the customer to buy a product and get one free result to a higher rate of a rerun on investment ton marketing. The productivity of the customer promotion used can be achieved through the extent to which the customers trust the strategy; hence the company must offer free samples for trials. The use of the free samples and buy one get one free should be used progressively in 2020 for the return on marketing investment to be increased.

The use of social media to contest to earn more money to save results in creating product awareness and sharing pictures in social media concerning products that Land and Nature offer create more awareness, resulting in a higher customer base. When cutters are aware of the products, they can purchase them online through online shopping, resulting in more sales and more return on marketing investment. The 2018 and 2019 return on investment on customer promotion shows that the company did not use more of the customer promotion technique since the values were less. To ensure that in 2020, the company earns more returns on marketing investment, it has to employ the use of social media to ensure that the salespersons can interact with customers to understand their needs and areas that need to be modified. The necessity for the use of social media leads to a high rate of product awareness to a wide range of customers, higher revenues, less marketing cost, and an increased customers base. In 2018 and 2019, the company did not enroll in using the social media technique in most of its products; hence, its awareness is limited. The company should be content to use social media to ensure that return on marketing investment in 20202 increases.