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Chapter 15
Sales Promotions
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Sales Promotion
“Sales Promotion is a Marketing Discipline that Utilizes a Variety of Incentive Techniques to Structure
Sales-Related Programs Targeted to Consumers, Trade, and/or Sales Levels that Generate a Specific,
Measurable Action or Response for a Product or Service.”
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Sales Managers are Under Great Pressure to Produce Results
Quickly.
Sales Promotion Strategies Target
Consumer, Trade, andThe Sales Force.
Assessment of Sales Promotion is
Relatively Easy.
Cost for ResultsIn This Industry Are
Relatively Low.
Reasons for the Growth of Sales Promotion
Why Are Companies Spending More and More
Money on SalesPromotion?
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Promotion Strategies
Promotion Can: Offer an
immediate inducement,
Cause customers to try a product,
Persuade customers to buy again,
Introduce a new product or build a brand over time.
Promotion Can’t: Create an image
for a brand, Compensate for a
lack of advertising,
Do much to compensate for a negative image,
Reverse a sales decline.
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ObjectivesObjectives
Intended to Change Consumer
Behavior
Building BrandsBuilding Brands
Can be Used to BuildBrand Images, ButMay be Long-Term
Introducing Introducing New ProductsNew Products
Advertising and PromotionWork Well Together
Here UsingPush & PullStrategies
Sales Promotion Strategies
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Consumer-Oriented Promotions
Consumer-Oriented
Promotion
Samples
Coupons
Premiums
Contests/sweepstakes
Refunds/rebates
Bonus packs
Price-offs
Event sponsorship
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Obtaining trial and repurchase
Increasing consumption of an established brand
Defending current customers
Targeting a specific market
Enhancing advertising and marketing efforts
Objectives of Consumer-Oriented Sales Promotion
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Advantages of Coupons
Offers price reduction only to consumers who are price sensitive
Does not rely on retailers’ cooperation
Generates trial of a new brand
Encourages non-users to try an established brand or users to repeat use
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Disadvantages of Coupons
Difficult to estimate redemption rates (<2%)
May be redeemed by loyal users who would buy anyway
Expensive
Misredemption and fraud
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ContestsContests
Compete for a Prize BasedOn Some Skill or Ability
Compete for a Prize BasedOn Some Skill or Ability
Generates High DegreeOf ConsumerInvolvement
Generates High DegreeOf ConsumerInvolvement
Can Help Revive
LaggingSales
Can Help Revive
LaggingSales
Contests and Sweepstakes
SweepstakesSweepstakes
Participants Submit NamesTo Be Included in Drawing
Participants Submit NamesTo Be Included in Drawing
Game – Type of Sweepstakes;
Time Frame MuchLonger
Game – Type of Sweepstakes;
Time Frame MuchLonger
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Effective way of getting the consumer to become involved with the brand by making the promotion product relevantGenerate interest in or excitement over a brand and attracting attention to advertisingEffective way of dealing with specific marketing problems
Advantages of Sweepstakes and Contests
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Disadvantages of Contests and Sweepstakes
May overshadow the ad or brand
May detract from brand franchise or image
Legal problems and administration
Presence of professionals or hobbyists who may submit entries and detract from effectiveness
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Station BreakGo to the McDonald’s Web site at www.mcdonalds.com.
This site provides a variety of activities for visitors including contests and sweepstakes.
What is your view of contests or sweepstakes where children might be involved (notice that the Web site is oriented toward younger customers)?
What is the purpose of the contest or sweepstakes in this case?
Do they help sell the products? Discuss in class.
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Refunds, Rebates, and Premiums
Refunds and RebatesA Marketer’s Offer to Return a Certain Amount Of
Money to the Consumer Who Purchases theProduct. i.e cash rebate + low-value coupon
PremiumsTangible Reward for Performing a Particular Act.
Direct – ReceivedAt Time of Purchase
Direct – ReceivedAt Time of Purchase
Mail – Proof of Purchase & Payment
Be Mailed In
Mail – Proof of Purchase & Payment
Be Mailed In
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Allowing the Customer to Experience the Product or Service.
Allowing the Customer to Experience the Product or Service.
Very Effective Strategy for Introducing A New or Modified Product.
Very Effective Strategy for Introducing A New or Modified Product.
Most Common Method of DistributingSamples is Through the Mail.
Most Common Method of DistributingSamples is Through the Mail.
9 Out of 10 Customers Prefer a SampleTo a Cents-Off Coupon to Introduce
Product.
9 Out of 10 Customers Prefer a SampleTo a Cents-Off Coupon to Introduce
Product.
Sampling
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Trade PromotionsTrade advertising is directed at wholesalers and retailers and represents 50% of the total promotional spending.
Four goals of a trade promotion are: Stimulate in-store merchandising or other trade support, Manipulate levels of inventory held by wholesalers and
retailers, Expand product distribution to new areas of the country
or new classes of trade, Create a high level of excitement about the product
among those responsible for its sale.
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Point-of-Purchase
Retailer Kits
Contests
Sweepstakes
Trade Shows
Types of Trade Promotions
Exhibits
Trade Incentives
Trade Deals
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Promotion Integration (Tab. 15.5)
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Objectives of Trade-Oriented Sales Promotions
Obtain distribution for new products
Maintain trade support for established brands
Encourage retailers to display established brands
Build retail inventories
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Some of the Most Popular POP Tools & TechniquesSome of the Most Popular POP Tools & Techniques
Mechanical ProductDispensers
Mechanical ProductDispensers
Price Cards
Signs
Banners
Special Racks
Carton Displays
Point-of-Purchase DisplaysDisplay Distributed to Retailers Used to Call
Customer’s Attention to Product Promotions.Display Distributed to Retailers Used to Call
Customer’s Attention to Product Promotions.
$12 Billion Business; Second Largest Category of Sales Promo Expenditures.
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Trade Shows & Exhibits
Allow Product Demonstrations,
Provide Information, & Answer
Questions.
$16.5 Billion is Spent Annually.
Trade Promotions
Retailer (Dealer) Kits
Materials That Help Reps Make Sales Calls Are Often Designed
as Kits.Contain Detailed Product Specs,
How-to-Do it Display, etc.
Contests & Sweepstakes
Advertisers Can Develop
Contests & Sweepstakes to
Motivate Resellers.
Occasional Use Only is Effective.
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Trade Incentives and Deals
Incentive Programsi.e. Used When Introducing
A New Product.Types Include Bonuses &
Dealer Loadings
Incentive Programsi.e. Used When Introducing
A New Product.Types Include Bonuses &
Dealer Loadings
$8 to $12 Billion Business Annually Designedfor Special Trade Promotional Circumstances. $8 to $12 Billion Business Annually Designed
for Special Trade Promotional Circumstances.
Trade DealsMost Important Reseller Sales Promo Technique.Types Include Buying & Advertising Allowances
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Sponsorships and Event Marketing
Sponsorships include a number of activities including: sports sponsorships, entertainment tours and attractions, festivals, fairs, and annual events, cause marketing – associating with an event that
supports a social cause, andarts.
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Sponsorships and Event Marketing
Event marketing describes the marketing practice in which a brand is linked to an event to create experiences for customers and associate the brand personality with a certain lifestyle.A sponsorship occurs when a company sponsors a sports event or concert, or supports a charity with its resources.It is attempting to increase the perceived value of the sponsor’s brand in the consumer's mind.Blimps, balloons, and inflatables are used at many events.
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Build Brands; Creating Both Awareness and
Reminders
Build Brands; Creating Both Awareness and
Reminders
Includes Everything From Hats With Logos
to T-shirts, & Mousepads
Includes Everything From Hats With Logos
to T-shirts, & Mousepads
Normally Have a Promotional Message Printed Somewhere
Normally Have a Promotional Message Printed Somewhere
Third Largest Category ofPromotional
Spending
Third Largest Category ofPromotional
Spending
Specialty Advertising