Transcript Sec. 17.2 – Sales Promotion

Promotional Concepts and
Strategies
Promotion
• Any form of communication a business
or organization uses to inform,
persuade, or remind people about its
products
Product Promotion
• Used to convince customers to buy your
products instead of those of the
competition
Institutional Promotion
• Used by a business to create a
favorable image for itself
– Example: Philip Morris
Promotional Mix – a combination of
the different types of promotion
• Personal Selling
• Advertising
• Direct marketing
• Sales promotion
• Public relations
Personal Selling
• Any form of direct contact
occurring between a salesperson
and a customer
Advertising
• Any paid form of non-personal
presentation and promotion of ideas,
goods, or services by an identified
sponsor
– Nationally, businesses spend about $200 billion
annually on various types of advertising
Direct Marketing
• A type of advertising directed to a
targeted group of prospects and customers
rather than to a mass audience.
– Printed direct mail, sent via regular mail to a
home or business
– Electronic direct mail
• It’s goal is to generate sales or leads for
sales representatives to pursue
Sales Promotion
• All marketing activities, other than
personal selling, advertising, and
public relations, that are used to
stimulate consumer purchasing and
sales effectiveness
Public Relations and Publicity
• Public Relations – any activity
designed to create a favorable image
toward a business, its products, or its
policies
Public Relations and Publicity
• Publicity – a specific kind of
public relations that involves
placing positive and newsworthy
information about a business, its
products, or its policies in the
media.
• Because it is free, business
often has the least control
over publicity
To see positive publicity
about Hogle Zoo, click on the
baby Orangutan.
To see negative publicity
abut Hogle Zoo, click on
the elephant
Coordination of Promotional
Mix
• Most businesses use more than
one type
• All types of promotion must be
coordinated
• Must consider the promotional
budget
Sales Promotion
Incentives that encourage
customers to buy products or
services
Trade Promotions –
Designed to gain
manufacturers’,
wholesalers’, and retailers’
support for a product
Types of Trade Promotions
• Promotional Allowances – a cash
payment or discounts given by
manufacturers to wholesalers or retailers
for performing activities to encourage
sales.
Types of Trade Promotions
• Cooperative Advertising – A
manufacturer supports the retailer by
helping to pay for the cost of advertising
its product locally.
Types of Trade Promotions
• Slotting Allowances – a cash premium
paid for placing a product on a retailer’s
shelves
Types of Trade Promotions
• Sales Force
Promotions –
awards given to
managers and
employees who
successfully meet
or exceed a sales
quota.
Consumer Sales Promotions
• Designed to encourage customers to buy a
product
Types of Consumer Promotion
• Coupons –
certificates
that entitle
customers
to cash
discounts
on goods or
services.
Types of Consumer Promotion
• Premiums – low-cost items given to
consumers at a discount or for free –
Should:
–
–
–
–
be low-cost
provide added value
negate the target audience’s price issue
effectively differentiate the product from
the competition
– create an immediate need to buy
Types of Premiums
• Factory packs (in-packs) – free gifts
placed in product packages
Types of Premiums
• Traffic builders –
pen, calendar, keychain given free for
visiting or attending
event
Types of Premiums
• Coupon plans – ongoing program
offering a premium in exchange for
labels, coupons or other tokens from one
or more purchases.
Incentives – generally higherpriced products earned and given
through contests, sweepstakes, and
rebates
• Contests – activities that require
demonstration of a skill
• Sweepstakes – game of chance
Incentives
• Rebates – discounts offered to customers
who purchase
Product Samples
• Free, trial-size sample
• Distributed through mail, door-todoor, or at a retail or trade show
• Especially important with new
products
Sponsorship
• The sponsoring company pays a fee for
the right to promote itself and its products
or services at or on a set location
• May negotiate the right to use logos and
names on retail products
Promotional Tie-In
• Involves arrangements between one or
more retailers or manufacturers.
Ex: McDonald’s and Kid Movies
Product Placement
• Featuring a product at a special
event, on television, or in the
movies
• http://www.youtube.com/watch
?v=AfAzUAxWELU
Television Commercial Vs. Product
Placement
(Based on actual TV show with 15 Million Viewers)
Question
TV Commercial
Product Placement
Cost?
$392,500 (US Only)
$22,000 (20 Countries)
Viewers?
15 Million (US Only)
120 Million (0ver 3 Years)
% of Viewers Watching?
8-10% (1.5 Million)
100 % (120 Million +)
1 Night
1 to 40 Years
Once
Hundreds of Times
1
20
Celebrities Use Product?
No
Yes
Different Time Slots?
No
Yes
Investment to Create Commercial
Yes
No
Can the Celebrity Drink My Product?
(Alcohol Products)
No
Yes
Duration of Ad?
Number of Times Shown?
Number of Countries?
Visual Merchandising & Display
• Coordination or all products in a place of
business so that the right image is
projected to the customers
Loyalty Marketing Programs
• Frequent buyer programs
• Reward customers for making multiple
purchases
Point-of-Purchase Displays
• Placed in hightraffic areas and
promote impulse
purchases.