Transcript Sales Promotion

Sales Promotion
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-1
Boony Doll a ‘boonanza’ for sales
promotion
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-2
Sales promotion
A direct inducement that offers an extra value or
incentive for the product to the sales force,
distributors, or the ultimate consumer with the
primary objective of creating an immediate sale.
A tool to
speed up sales
An extra
incentive to buy
Targeted to
different parties
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-3
Sales promotion vehicles
Consumer-oriented
Samples
Coupons
Trade-oriented
Contests, dealer incentives
Trade allowances
Premiums
Contests/sweepstakes
Point-of-purchase displays
Refunds/rebates
Training programs
Bonus packs
Trade shows
Price-off deals
Cooperative advertising
Loyalty programs
Event marketing
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-4
Explanations for increase in sales
promotion
Growing power of retailers
Some
reasons
Declining brand loyalty
Increased promotional sensitivity
Brand proliferation
Fragmentation of consumer markets
Short-term focus of marketers
Increased accountability
Clutter
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-5
The shifting role of the sales
promotion agency
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-6
Consumer-oriented sales
promotion
Identify target audiences
Determine sales promotion objectives
Obtain trial and repurchase
Increase consumption
Target a specific market segment
Defend current customers
Enhance IMC and build brand equity
Set measurable goals
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-7
Myer gift with purchase
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-8
Types of consumer promotions used by
packaged goods manufacturers
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-9
Sampling
Sampling works best when
The products are
of relatively low
unit value, so
samples do not
cost much
The products are
divisible and can
be broken into
small sizes that
can reflect the
product’s features
and benefits
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
The purchase
cycle is relatively
short so the
consumer can
purchase in a
relatively short
time period
15-10
Bertoli’s ‘Taste of Tuscany’
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-11
Sampling distribution
Door-to-door
Methods
Direct mail
In-store sampling
On-package sampling
Event sampling
With magazine/newspaper
Other
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-12
Bundle of baby products
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-13
Coupons
The
oldest and
most widely used
sales promotion tool
Coupons
Used by
virtually
all packaged goods
manufacturers
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-14
Advantages and limitations of
coupons
Advantages
Disadvantages
Appeal to price-sensitive
consumer
Difficult to determine how
many consumers will use
coupons and when
Can offer price break without
retailer’s cooperation
Coupons are often used by
loyal consumers who may
purchase anyway
Can be effective way to induce
trial of new or existing
products
Can be way to defend market
share and encourage
repurchase
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
Declining redemption rates
and high costs of couponing
Misredemption and fraud
15-15
Coupon distribution
Other
Magazines
In/on pack
Direct mail
Newspaper coop.
Shop-a-docket
Freestanding
inserts
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-16
Shop-a-docket: an Australian
innovation
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-17
Premiums
Premium: an offer of an item of
merchandise or service either free or at a
low cost that is an extra incentive for
customers
Two types of premiums
Free premiums:
Only require
purchase of the
product
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
Self-liquidating
premiums: require
consumer to pay some
or all of the cost of the
premium
15-18
McDonald’s Happy Meals
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-19
Contests and sweepstakes
Contest: a promotion where consumers compete for prizes or
money on the basis of skills or ability. Winners are determined
by judging entries or ascertaining which entry comes closest to
some predetermined criteria.
Sweepstakes/games: a promotion where winners are
determined purely by chance and cannot require a proof of
purchase as a condition for entry. Winners are chosen by
random selection from a pool of entries or generation of a
number to match those held by game entrants.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-20
Problems with contests and
sweepstakes
Do not contribute to brand building
Problems
Focus not on brand
Effectiveness
Effectiveness
Legal
considerations
Negative
publicity
May
generate
negative publicity
Federal
regulations
Use by professionals or hobbyists
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-21
Other popular consumer sales
promotion tools
Bonus packs
Refunds and
rebates
Other
promotional
tools
Event marketing
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
Price-off deals
Frequency/
loyalty
programs
15-22
A bonus for consumers
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-23
Loyalty programs
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-24
Summary of consumer-oriented
promotions and market objectives
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-25
Trade-oriented sales promotion
objectives
Maintain trade support
for existing products
Obtain distribution of
new products
Objectives
Build retail inventories
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
Encourage retailers to
display
existing brands
15-26
Types of trade-oriented promotions
Contests and incentives
Trade allowances
Buying
Buying
allowances
Allowances
Point-of-purchase
displays
Promotional
Promotional
Allowances
allowances
Sales training programs
Trade shows
Slotting
Slotting
Allowances
allowances
Cooperative advertising
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-27
Types of cooperative advertising
Ingredientsponsored
coop advertising
Horizontal
cooperative
advertising
Cooperative
advertising
Vertical
cooperative
advertising
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-28
The sales promotion trap
1
3
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
2
4
15-29
Summary and conclusions
• Over the past two decades, marketers have been
allocating increased share of promotional budget to
sales promotion.
• Sales promotion techniques can be:
– consumer oriented
– trade oriented.
• Sales promotion techniques include sampling,
coupons, premiums, competitions, rebates and
refunds.
• Sales promotion abuse can occur when marketers
become overly dependent on sales promotions
techniques at the expense of building long-term
brand position, brand equity and customer
relationships.
Copyright  2009 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion by Belch
Slides prepared by Bronwyn Higgs, Victoria University, Australia
15-30