chapter 14 global marketing decisions: sales promotion

© 2005 Prentice Hall 14-1

Chapter 14

Global Marketing Decisions:

Sales Promotion, Personal

Selling, Special Forms of

Marketing Communication


Sales Promotion

Sales promotion refers to any paid consumer or trade communication program of limited duration usually aimed at stimulating sales / trials

– Price (rebates, discounts, coupons) vs. non-price promotions (sampling, premiums, sweepstakes, contests, etc.)

– Consumer vs. trade promotions (increase availability in channel)


Sales Promotion

Provide a tangible incentive to buyers (lower prices, etc.)

Reduce the perceived risk associated with purchasing a product (sampling)

Provide accountability for communications activity (results can be tracked)

Provide method of collecting additional data for database (forms to be filled in)


Sales Promotion: Global or Local

In countries with low levels of economic

development, low incomes limit the range of

promotional tools available

– Free samples, demonstrations

Market maturity can also be different from

country to country

– Coupons and sampling in growing markets

– Trade allowances and loyalty programs in mature

markets


Sales Promotion: Global or Local

Local perceptions of a particular promotional tool or program can vary – Coupon usage not popular in India

Local regulations may rule out use of a particular promotion in certain countries

Trade structure in the retailing industry can affect the use of sales promotions – Consolidated retail structures require more trade

promotions (USA, Europe)

– Fragmented retail structures (India) require less trade promotions


Sampling

Sampling

– Provides consumer with opportunity to try product at no cost

– May be distributed in stores, in the mail, through print media, at events, or door-to-door

– Point-of-use sampling (Starbucks’ chill patrols; Mylanta introduction in India)

– Point-of-dirt sampling (Unilever’s Lever 2000 hand wipes in food courts and petting zoos)


Couponing

Couponing

– Printed certificates entitle the bearer to a price

reduction or some other special consideration

for purchasing a particular product

Couponing accounts for 70% of consumer

promotion spending in the US

Free standing inserts, on-pack coupons, in-

pack coupons, cross coupons)


Couponing

Stimulate trial by non-users

Operant conditioning of users (Kroger’s 20

cents a gallon price off on gas)

Not widely used in Asia since using a

coupon is considered a sign of cheapness


Couponing


Sales Promotion: Issues and

Problems

Consumer fraud

– Pepsi promotion with Apple

Regulations vary by country

– Europe regulates promotions heavily

Cultural dispositions to coupons and other sales

promotions

– Malaysia, India see coupon usage as embarrassing

– Islam frowns on gambling so sweepstakes may not

work


Personal Selling

Person-to-person communication between a company representative and potential buyers

Focus is to inform and persuade prospect

Short-term goal: make a sale

Long-term goal: build relationship

Buyer and seller may come from different cultural backgrounds


Personal Selling

Useful when countries regulate media heavily

Japan – comparative advertising is difficult hence product comparisons can be made on a face to face basis

Low wage countries – cheaper to build a sales force

Issue: host country nationals or expats?


Sales Force Nationality

Expatriates

Host country

Third country

Other options


Expatriates

Advantages

– Superior product

knowledge

– Demonstrated

commitment to service

standards

– Train for promotion

– Greater HQ control

Disadvantages

– Higher cost

– Higher turnover

– Cost for language and

cross-cultural training

Return


Host Country

Advantages

– Economical

– Superior market

knowledge

– Language skills

– Superior cultural

knowledge

– Implementation

quicker

Disadvantages

– Needs product training

– May be held in low

esteem

– Language skills may

not be important

– Difficult to ensure

loyalty

Return


Third Country

Advantages

– Cultural sensitivity

– Language skills

– Economical

– Allows regional sales

coverage

Disadvantages

– May face identity

problems

– May be blocked for

promotions

– Needs product and/or

company training

– Loyalty not assured

Return


Special Forms of Marketing

Communications

Direct Marketing

– Direct mail

– Catalogs

– Infomercials, Teleshopping

Event Sponsorship

– Concerts, sporting events

– Product placement in movies

Internet Communications


Direct Marketing

Any communication with a consumer or

business recipient that is designed to

generate a response in the form of:

– An order

– Request for further information

– A visit to a store or other place of business


Direct Marketing vs. Mass

Marketing


One-to-One Marketing

Building from Customer Relationship

Management

– Identify customers and accumulate detailed information

about them

– Differentiate customers and rank them in terms of their

value to the company

– Interact with customers and develop more cost efficient

and effective forms of interaction

– Customize the product/service offered to the customer


Catalogs

A magazine style

publication that

features photographs

and extensive

information about a

company’s products


Product Placements

Movies, TV programs, books, etc.

Low attributions hence low skepticism

Circumvent zipping and zapping

Realistic slice-of-life placement

Ethically-charged products

Fit of the brand with the placement segment and its effect on recall and attitudes

Risk of the product being shown in an unfavorable light

Joint promotions between the movie and the product

Too many placements in a program

chapter 14 global marketing decisions: sales promotion

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