Transcript free game gifts

Chapter 18
Sales Promotion
Sales Promotion
• Using incentives to create a
perception of greater brand value
• Consumer Market
– Induce household consumers to purchase a
firm’s brand
• Trade-Market
– Motivate distributors, wholesalers, and retailers
to stock and feature a brand
• Business Buyer
– Cultivate buyers in large corporations who
make purchase decisions
Ch 18: Sales Promotion 2
Sales Promotion Examples
Coupons
Trade Shows
Contests
Gift Cards
Allowances
Sweepstakes
Incentives
Sampling
Price-off deals
Premiums
Brand placements
Loyalty Programs
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Importance of Sales
Promotion
• $100 billion in 2000
• Growth rate: 9 – 12 percent
• Reasons for growth:
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Demand for accountability
Short-term orientation
Consumer response to promotions
Proliferation of brands
Increased power of retailers
Media clutter
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Objectives for ConsumerMarket Sales Promotion
1. Stimulate trial purchase
2. Stimulate repeat purchases
3. Stimulate larger purchases
4. Introduce a new brand
5. Combat or disrupt competitors
6. Contribute to IMC
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Consumer-Market Sales
Promotion Techniques
1. Coupons
2. Price-off deals
3. Premiums
4. Contests/sweeps
5. Samples & trials
6. Phone gift cards
7. Brand placements 8. Rebates
9. Frequency programs
10.Event sponsorship
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Coupons are the most
widely used form of
consumer sales promotion
Coupons
• Entitles a buyer to a price reduction
for a product or service
• Advantages
– Give a discount to price sensitive
consumer while selling product at full
price to others
– Induce brand switching
– Timing and distribution can be controlled
– Stimulates repeat purchases
– Gets regular users to trade up within a
brand array
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Coupons
• Disadvantages
– Time of redemption cannot be
controlled
– No way to prevent current customers
from redeeming coupons
– Coupon programs require costly
administration
– Fraud is a serious, chronic problem
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Price-Off Deals
• Offers consumer reduced price at
point of purchase through specially
marked packages
• Advantages
– Controllable by manufacturer
– Can effect positive price comparisons
– Consumers believe it increases value
of a known brand
• Disadvantage
– Retailers believe it creates inventory
and pricing problems
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Premiums and Advertising
Specialties
• Premiums: free or at a reduced
price with another purchase
• Free premiums provide item at no
cost
• Self-liquidating premiums require
consumers to pay most of the
cost of the item
• Advertising specialties:
– A message placed on a free, useful
item
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Premiums attract
attention to a brand and
offer the consumer
something for free
Contests and Sweepstakes
• Contests: consumers compete for prizes
based on skill or ability.
• Sweepstakes: winners picked by chance
• Both create excitement and interest
• But . . .
– Legal and regulatory requirements are
complex
– Consumers may focus on the game rather
than the brand
– Difficult to get an IBP message across in a
game
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Samples and Trial Offers
• Sampling: Giving consumer an
opportunity to use a brand on a trial basis
with little or no risk
• Types of sampling
– In-store
– Door-to-door
– Mail
Newspaper
On-package
Mobile
• Trial offers
– Used for more expensive items
– Consumer tries product for a fixed time
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Phone and Gift Cards
• Manufacturers offer either for free
or for purchase debit cards
– with phone time
– or preset spending limits
• Examples include offers from
Lexus, Oldsmobile, and The Gap.
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Rebates
• Money back offer requiring the buyer to
mail a request for money back from the
manufacturer
• Often tied to multiple purchases
• Many consumers fail to bother sending
the request
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Frequency Programs
• Also known as continuity
programs
• Offers customers
discounts or free products
for repeat patronage
• Common in airline, travel,
and restaurant businesses
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Event sponsorship
• When a firm sponsors or
cosponsors an event,
the brand gains
credibility with the event
audience
• Now the fourth most
popular form of
promotion in U.S.
• Most preferred venue:
sporting events
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Sales Promotion Directed at
Trade and Business Buyers
• Objectives:Use a “push” strategy:
Push the product into the
distribution channel to the
consumer
– Obtain initial distribution
– Increase order size
– Encourage cooperation with consumer
market sales promotions
– Increase store traffic
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Trade-Market Sales
Promotion Techniques
• Point-of-purchase displays
• Incentives: Push money
• Allowances: Merchandise allowances, slotting fees, billback allowances, off-invoice allowances
• Sales Training Programs
• Cooperative (Co-Op) Advertising
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Business Market Sales
Promotion Techniques
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Trade Shows
Business gifts
Premiums and advertising specialties
Trial offers
Frequency programs
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Trial offers are very
effective in the business
market. Why?
Sales Promotion, the
Internet, and New Media
• Big tech companies give away their
products
• Sampling removes risk associated with
consumer trial
• Internet firms use incentives to make Web
sites “sticky”
• Internet is used to implement sales
promotions
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Risks of Sales Promotion
• Create a price orientation
• Borrow from future sales
• Alienate consumers
• Time and expense
• Legal considerations
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Coordination Challenge
• Message coordination
• Media coordination
• Research conclusions
-Short term effects can be dramatic
-Short term effects are often not profitable
-Rare for long-term effects to occur
-Most power effects result from advertising
and sales promotion being used together
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