Transcript Document

Chapter 11:
SALES PROMOTION:
CONSUMER, TRADE,
and
BUSINESS MARKET
TECHNIQUES
11.1
Basic Forms of Sales Promotion
BASIC FORMS OF SALES PROMOTION

Trade-Market Sales Promotion

Trade Market Sales Promotion

Business-Market Sales Promotion
11..2
The Importance and Growth of Sales Promotion
SALES PROMOTION IS GROWING FASTER THAN
ADVERTISING
GROWTH IN THE USE OF SALES PROMOTION
 Demand for Greater Accountability
 Short-Term Orientation
 Consumer Response to Promotions
 Proliferation of Brands
 Increased Power of Retailers
 Media Clutter
11..3
Sales Promotion Techniques, Like Couponing, Are
Designed to Have a Short-Term Effect on Sales
Sales Promotion in the Consumer Market
OBJECTIVES FOR CONSUMER-MARKET SALES
PROMOTION

Stimulate Trial Purchase

Stimulate Repeat Purchases

Stimulate Larger Purchases

Introduce a New Brand

Combat or Disrupt Competitors’ Strategies

Contribute to Integrated Marketing Communications
Sales Promotion in the Consumer Market (con’t)
CONSUMER MARKET SALES PROMOTION TECHNIQUES
 Coupons
 Oldest and Most Widely Used Sales Promotion
 Annually, 300 Billion Distributed
 Many Advantages
 Also Problems
 Price-Off Deals – Offers Consumers ¢ or $ off Merchandise
 Premiums and Advertising Specialties
 Premiums – Items offered Free or Reduced w/Purchase
 Free Premium – Provides an Item at No Cost
 Self-Liquidating Premium – Consumer Pays Most or
All Cost of Premium
11.6
“Price Off” Deals Are
Commonly Used
by Local Retailers
11.7
Sales Promotion in the Consumer Market (con’t)
CONSUMER MARKET SALES PROMOTION TECHNIQUES
(con’t)
 Contests and Sweepstakes
 Contest – Consumers Compete for Prizes
 Sweepstakes – Promo where Winners are Determined by
Chance
 Substantial Problems with Both
– Regulations and Restrictions
– Game Becomes Primary Focus; Brand Secondary
– Hard to Get Message Across in Context of Game
11.8
Sales Promotion in the Consumer Market (con’t)
CONSUMER MARKET SALES PROMOTION TECHNIQUES
(con’t)

Sampling and Trial Offers
 Sampling – Provide Consumers with Trial Opportunity
 In-Store Sampling
 Door-to-Door Sampling
 Mail Sampling
 Newspaper Sampling
 On-Package Sampling
 Mobile Sampling
 Trial Offers
11.9
Sampling is an Effective
Way to Create Trial-Use
Within Appropriate
Target Markets
Sales Promotion in the Consumer Market (con’t)
CONSUMER MARKET SALES PROMOTION TECHNIQUES (con’t)

Phone and Gift Cards

Product Placement (Brand Placement)

Rebates

Frequency Programs

Event Sponsorship
11.11
Sales Promotion in the Trade and Business Markets
OBJECTIVES FOR PROMOTIONS IN THE TRADE MARKET




Obtain Initial Distribution
Increase Order Size
Encourage Cooperation with Consumer-Market Sales
Promotion
Increase Store Traffic
11.12
Sales Promotion in the Trade and Business Markets
TRADE-MARKET SALES PROMOTION TECHNIQUES
 Push Strategy – Sales Promotions Directed at Trade
 Point-of-Purchase Displays
 Incentives
 Allowances
– Merchandise Allowances
– Slotting Fees
– Bill Back Allowances
– Off-Invoice Allowances
 Sales-Training Programs
 Cooperative (Co-op) Advertising
– Vertical Cooperative Advertising
11.13
Sales Promotion in the Trade and Business Markets
BUSINESS MARKET SALES PROMOTION TECHNIQUES

Trade Shows

Business Gifts

Premium and Specialty Advertising

Trial Offers

Frequency Programs
11.14
Frequency Programs
Encourage Brand
Loyalty Among Businesses
11.15
Sales Promotion, the Internet, and New Media
USE OF SALES PROMOTION BY INTERNET COMPANIES
 Sampling
 Incentives
 Loyalty Programs
 Virtual Tour of Prizes in Contests
 Use of the Internet and New Media to Implement Sales
Promotion
 On-Line Promotional Stores
 Other On-Line Companies Help
 Sweepstakes
11.16
The Risks of Sales Promotions
CREATING A PRICE ORIENTATION
BORROWING FROM FUTURE SALES
ALIENATING CURRENT CUSTOMERS
TIME AND EXPENSE
LEGAL CONSIDERATIONS
11.17
The Coordination Challenge


Message Coordination
 Message Should Attract Attention or Offer Consumer
Increased Value: Reduce Price, Chance to Win a Prize
 Attention and Value Act as Incentive to Choose Brand
 Hard to Coordinate Promotion Message with Advertising
Media Coordination
 Reaching Right Target is Critical
 Advertising Should Always Precede Sales Promotion
11.18
Conclusions From Recent Research
SHORT-TERM PRODUCTIVITY OF PROMOTIONS MUCH
MORE DRAMATIC THAN SHORT-TERM ADVERTISING
EFFECTS
1% REDUCTION IN PRICE PRODUCES GREATER
RESULTS THAN 1% INCREASE IN ADVERTISING
SALES PROMOTION RARELY GENERATES LONG-TERM
EFFECTS
MOST POWERFUL EFFECTS COME FROM ADVERTISING
& SALES PROMOTION USED TOGETHER
11.19