Transcript Chapter 15 Sales Promotion, Point-of

15
Sales Promotion, Pointof-Purchase Advertising,
and Support Media
Coordination Challenge
Directories
Events
Television
Internet
Billboards
Magazines
Transit
Radio
Branded
Entertainment
Traditional Support Media
• Purpose: To reinforce or extend a
message being delivered through
other media
– Signs, billboards
– Transit
– Aerial
– Specialty
– Directory
Outdoor Signage and Billboards
• Advantages
– Wide local exposure
– Captivating
– Around-the-clock
exposure
– Address an immediate
need or desire
• Disadvantages
– Message limits
– Location affects
impact
– Relatively expensive
– Criticized by
environmental groups
Transit Ads
• Transit Ads
– Urban environments
– Demographic segmentation
– Timely to purchase
– Build brand awareness
Aerial Ads
• Aerial Ads
– Blimps increasingly common
– Common at sporting events
– Networks are in control
What is Vehicle Wrapping?
• Vehicle wrapping is a form of outdoor advertising
• Digitally-generated graphics are printed on vinyl,
and subsequently “wrapped” onto vehicles
• Has become an international advertising medium
Outdoor Advertising - An
Overview
• U.S. advertisers spent $4.8 billion on outdoor media in
1999
• Outdoor ads represent 2% of all advertising media
• Growing approximately 10% per year
• Growth is faster than:
– Total Advertising Expenditures
– Gross Domestic Product (GDP)
The Power of the Personal
Vehicle
The Average Person:
• Spends
two hours per day in a car
• Averages 48 miles per day on the weekends
• Makes four or five trips each day
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125 million Americans commute to work daily
Daily trips have increased by 110% since 1970
Total number of cars on the road is up over 174%
Motorists travel 3.4 trillion miles each year
Source: Federal Highway Administration
Outdoor Advertising Association of America (OAAA)
Wrapping for the Advertiser
• Advertisers approach trucking companies,
dealerships, etc. to “use” their vehicle(s)
• Costs from $500 to $2500 to wrap an automobile
• The use of vinyl technology has made the medium
more cost effective
• Aids in helping build awareness or maintain brand
image
Continued . . .
• Global Positioning System (GPS)
– Satellite-based tracking system
– Installed by plugging device into cigarette lighter
– Provides 24-hr., three dimensional position,
velocity and time information
– Updates data every four minutes
– Is key in determining OTS (opportunity to see)
Wrapping for the Consumer
Companies such as Autowraps, Media Vehicles and
Ads on Wheels are designed to accommodate people
who would like to have their vehicle wrapped
http://www.adsonwheels.com
http://www.autowraps.com
http://www.mediavehicles.com
Continued. . .
Three Types of Vehicle Wrapping
• Full Wrap
– Covers entire exterior, including windows
– Driver is paid $450 max per month
• Decal Graphic
– Requires only 50%exterior coverage, usually a
large graphic or text image
– Driver is paid $250 max per month
• Window Wrap
– Covers two rear windows and back windshield
– Driver is paid $150 max per month
Maintenance
• Takes 8 hrs for full wrap • Driver is asked to provide
proof of insurance, a DMV
report, and sign
• Takes 4 hrs for decal
agreements
and/or window wrap
• Installation takes place
within 30 mile radius of
driver
• Required to drive approx.
1000 hours per month
• Meet with field monitor for
a monthly inspection, and
to switch out GPS system
Businesses - Advantages
• Can provide exposure in urban areas and on the
interstate
• Allows for outdoor advertising where no billboard
space exists
• Have the ability to entertain, educate and inform
• Geographic and demographic flexibility
• This form of advertising is less intrusive and
annoying than other forms
Businesses - Disadvantages
• Must maintain message control
– Social Responsibility
– I.e. “Make 7…Up Yours”
• Cannot be used as the sole promotional tool
– Component of an overall communications mix
Consumer - Advantages
• Generate extra income
• Low-end and high-end cars are used
• Some companies are willing to donate their
wrapped vehicles if motorists will drive them
• Great for those with no mode of transportation
• Some companies sell their wrapped vehicles at
special discount rates
Consumer - Disadvantages
• Too eye-catching for the open road
• “Sophisticated Graffiti”
• Could spark an onslaught of spray painting on
buildings, cars and trucks
• Difficult to break contracts
Airport Advertising: Dioramas
The following airport advertising info is
from Yong Jun Sung & Pumsoon Park
- the first and most commonly utilized
- located throughout the terminals in
arrivals, departures, ticketing and
baggage claim areas
- Wall, shelter, and king-size dioramas
Wraps
- The most widely used form of U.S.
- Applied to flat surfaces
(walls, windows, and floors)
- Flexible in size and shape
- For short or long term campaign
Cylinder Showcases
- Highly visible units
- Display products and services
- Secure setting for products such as
perfume, jewelry, fashions, and ceramics
SkyScreens (Plasma)
- Provide digital advertising and
information
- At high-traffic passenger cluster areas
- Catch the eyes of people
Baggage Cart Sponsorships
- Deliver total audience coverage
- Message frequency
Others
Bus shelter
Kiosks
Leaflet dispensers
Message Effectiveness
On average
Traveler arrive at airport 57 minutes
Prior to departure
On average
Passengers spend 93 minutes at the airport
High recall rates for airport advertising
How We Measure?
1. Overall airport traffic
Ex) World airport ranking by total passengers 1999
Atlanta – 78,092,940 (Rank #1)
JFK, NY – 31,700,604 (Rank #20)
Orlando – total passengers 29,203,755 (Rank #24)
2. The number of brochures or leaflets taken from displays
Rate examples
JFK International Airport (NY)
Orlando International Airport
Annual Passenger
31,700.604
29,203,755
Monthly Passenger
2,641,717
2,433,644
Popular Vehicles
Size
JFK Airport (NY)
Orlando Airport
Diorama
43” x 62”
$ 4,000
$ 3,300
Spectacular
7’ x 11’
$ 12,000
$ 9,500
$ 24,000
$ 8,000
16” x 10”
$ 2,000
$ 1,500
6’ x 4’
$ 35,000
$ 25,000
Exhibition Area
Interactive Courtesy
Phone Center
SkyScreen
* per month & unit
Directory Advertising:
CD-ROM and Web-based
Directories
• Advantages
• Disadvantages
– High acceptance
– Too many directories
– High availability
– Long lead times
– Final link to purchase
– Limited creativity
Power Struggles and Sales
Promotion
• Sales promotion plays a key strategic role in the
channel of distribution
– Big name brands must be supported with sales promotion
and POP to get the support of retailers through self space
allocation.
– The top 10 retailers control 43% of all packaged goods
sales so they can dictate which brands get how much shelf
space.
– Brand marketers spend $30 billion a year on sales
promotion and POP to gain favored retailer treatment and
to provide incentives to household consumers and
business buyers.
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
Sales Promotion Examples
Coupons
Trade shows
Contests
Gift Cards
Allowances
Sweepstakes
Incentives
Sampling
Price-off deals
Premiums
Brand placements
Loyalty programs
Sales Promotion vs. Advertising
• Short term demand vs. long term demand
• Encourage brand switching vs. brand loyalty
• Induce trial use vs. encourage repeat
purchase
• Promote price vs. promote image
• Immediate results vs. long term effects
• Measurable results vs. difficult to measure
Importance of Sales Promotion
• $100 plus billion industry
• Growth rate: 4-8 percent
• Reasons for growth:
– Demand for accountability
– Short-term orientation
– Consumer response to promotions
– Proliferation of brands
– Increased power of retailers
– Media clutter
Objectives for Consumer-Market
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
Consumer-Market Sales
Promotion Techniques
1.
2.
3.
4.
5.
Coupons
Price-off deals
Premiums
Contests/sweeps
Samples and trials
6.
7.
8.
9.
Phone gift cards
Brand placements
Rebates
Frequency
programs
10. Event sponsorship
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
Coupons (cont’d)
• 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
Price-Off Deals
• Offering consumers a reduced price at point of
purchase through specially marked packages
• Advantages
– Is controllable by manufacturer.
– Affects positive price comparisons.
– Increases consumers’ belief in the value of a known
brand.
• Disadvantage
– Retailers believe it creates inventory and
pricing problems.
Premiums and
Advertising Specialties
• Premiums
– Free or reduced price for an item with the purchase
of another item.
• 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
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.
Nordstrom Launches 'Twilight' Line, Gives
Away Tickets to 'New Moon' Premiere
Samples and Trial Offers
• Sampling
– Giving a consumer an opportunity to use a brand on a
trial basis with little or no risk
• Types of sampling
– In-store
– Newspaper
– Door-to-door – On-package
– Mail
– Mobile
• Trial offers
– Used for more expensive items
– Try product for a fixed time
– Trader Joes Example
Gift Cards
• Manufacturers offer either for free or for
purchase debit cards.
– With phone time
– Or with preset spending limits
• Examples
– Offers from Sephora, and The Gap.
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.
• Canon example
Frequency Programs
• Also known as “continuity programs”
– Offer customers discounts or free products for
repeat patronage
– Common in the airline, travel, and restaurant
businesses
Objectives for Promotions
in the Trade Market
• Objectives: Use a “push” strategy
– Push a product into the distribution channel
towards the consumer
• Obtain initial distribution
• Increase order size
• Encourage cooperation with consumer market
sales promotions
• Increase store traffic
Trade-Market Sales Promotion
Techniques
• Incentives: Push money
• Allowances: Merchandise allowances,
slotting fees, bill-back allowances, offinvoice allowances
• Sales Training Programs
• Cooperative (Co-Op) Advertising
Business Market Sales
Promotion Techniques
• Trade Shows
• Business gifts
• Premiums and advertising
specialties
• Trial offers
• Frequency programs
Trial offers are very effective in the business
market. Why?
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Sales Promotion, the Internet,
and New Media
• Sampling removes risk associated with
consumer trial.
• Internet firms use incentives to make
Web sites “sticky.”
• Internet is used to implement sales
promotions and distribute coupons.
Risks of Sales Promotion
• Creates a price orientation
• Borrows from future sales
• Alienates consumers
• Time and expense
• Legal considerations
Point-of-Purchase (P-O-P)
Advertising
• Materials used in the retail setting to attract
shoppers’ attention to a brand, to convey
primary product benefits, or highlight pricing
information.
• Objectives for P-O-P Advertising
– Draw consumers’ attention to a brand in the retail
setting.
– Maintain purchase loyalty among brand loyal users.
– Stimulate increased or varied usage of the brand.
– Stimulate trial use by users of competitive brands.
P-O-P Advertising and the
Trade and Business Markets
• Product displays and information sheets
encourage retailers to support one distributor or
manufacturer’s brand over another.
– P-O-P promotions can help win precious shelf space
and exposure in a retail setting.
– A P-O-P display is designed to draw attention to a
brand, increase turnover, and possibly distribute
coupons or sweepstakes entry forms.
– To combat losing business to online shopping,
retailers are trying to enliven the retail environment,
and P-O-P displays are one strategy.
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.