advertising: sales promotion. sales promotion a special incentive to: –distributors...
TRANSCRIPT
ADVERTISING:
Sales Promotion
Sales Promotion
• A special incentive to:
– Distributors
– Salespeople, or
– Customers
• to encourage an immediate sale
Growth of Sales Promotion
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
'89 ‘90 ‘91 ‘92 '93 '94 '95 '96 '97 '98 '99 ‘00
Consumer Promotions
Media Advertising
Trade Promotions
Percent of Total Promotional Dollars, 3-year Moving Average.Percent of Total Promotional Dollars, 3-year Moving Average.
Consumer Promotions Use
• Franchise Building– LONG TERM preferences– Communicate distinctive brand identity– Example:
• “Frequency” programs with brand or store image
• Non-Franchise Building– IMMEDIATE sales– Examples:
Price-off dealsBonus packsRebates or refunds
Types of Promotions
• Obtaining trials
• Increasing repurchase
• Increasing overall consumption
• Rewarding current customers
• Reaching out to a new market
• Enhancing advertising efforts
Objectives of Sales Promotions
Sales Promotion Vehicles
Consumer-Oriented “Pull”
Samples
Coupons
Premiums
Contests/sweepstakes
Refunds/rebates
Bonus packs
Price-offs
Event sponsorship
Trade-Oriented “Push”
Contests, dealer incentives
Trade allowances
Point-of-purchase displays
Dealer premiums
Trade shows
Cooperative advertising
Sampling
The Products Are of Relatively Low Unit Value,
So Samples Don’t Cost Much
The Products Are of Relatively Low Unit Value,
So Samples Don’t Cost Much
The Products Are Divisible and Can
Be Broken Into Small Sizes That Can Reflect the
Products Features and Benefits
The Products Are Divisible and Can
Be Broken Into Small Sizes That Can Reflect the
Products Features and Benefits
The Purchase Cycle Is
Relatively Short So the
Consumer Can Purchase in a
Relatively Short Time Period
The Purchase Cycle Is
Relatively Short So the
Consumer Can Purchase in a
Relatively Short Time Period
The Products Are of Relatively Low Unit Value,
So Samples Don’t Cost Much
The Products Are of Relatively Low Unit Value,
So Samples Don’t Cost Much
The Products Are Divisible and Can
Be Broken Into Small Sizes That Can Reflect the
Products Features and Benefits
The Products Are Divisible and Can
Be Broken Into Small Sizes That Can Reflect the
Products Features and Benefits
Sampling Works Best When
Sampling Works Best When
Samples -- Media
• Door-to-door
• Direct mail
• In-store sample pack
• Cross-product sampling
• Co-op package distribution
• With newspaper / magazine
• Any of above with coupon
Display CardsDisplay Cards
Coupons
Advantage
• Works – will increase sales
Disadvantages
• May be redeemed by loyal users who would buy anyway
• Sometimes difficult to estimate redemption levels in advance
• Expensive
43%
35%
29%
25%
24%
20%
12%
11%
8%
7%
2%Gum
Candy
Carbonated Beverages
Adult Cold Remedies
Pet Food
Coffee
Sanitary Protection
Deodorants
Liquid Detergents
Ready-to-Eat Cereal
Disposable Diapers
Percent of Sales with Coupons
ADVANTAGES:
• Gets consumer involved with the product
• Generates interest and attracts attention to advertising
DISADVANTAGES
• May overshadow the product
• May detract from brand image
Sweepstakes and Contests
How much is spent (billions)
5.00
1.75
2.50
4.704.203.70
3.302.80
2.10
$0
$1
$2
$3
$4
$5
$6
88 89 90 91 92 93 94 95 96
Where it is spent
10%
8%6%
67%
9%
Sports MusicFestivals Cause Mktg.Arts
Spending on Event Sponsorship
Benefits of Event Marketing
1. Greater Awareness
2. Associate Product with Event
3. New Potential Clients (Sales)
4. Media Coverage
Competition
ContinuePromotions
ContinuePromotions
ReducePromotions
ReducePromotions
Our Firm
Lose market share
low profits
Maintain share
low profits
Higher profits for everyone!
Gain market share But low profits
The Sales Promotion Trap
Quote of the day
If you’re selling an inexpensive
product that is purchased
regularly, and it’s really great,
just give away free samples.
Mike BasilProfessor of Marketing