Transcript ch_15_sales_promotion_p-o

7e
Sales Promotion,
Point-of-Purchase
Advertising, and
Support Media
1
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives
• Explain the importance and growth of
modern sales promotion
• Describe the sales promotion techniques
used in the consumer market
• Describe the sales promotion techniques
used in the trade channel and business
markets
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2
Learning Objectives
• Identify the risks to the brand of using
sales promotion
• Understand the role and techniques of
point-of-purchase advertising
• Describe the role of support media in a
comprehensive IBP strategy
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
3
Sales Promotion
• Use of incentive techniques to create a
perception of greater brand value among
consumers, the trade, and business
buyers
• Generates short-term increase in sales
by:
– Motivating trial use
– Encouraging larger purchases
– Stimulating repeat purchases
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
4
Types of Sales Promotion
Consumer-market sales promotion:
Induce household consumers to purchase
a firm’s brand
Trade-market sales promotion: Motivate
distributors, wholesalers, and retailers to
stock and feature a firm’s brand in their
store
Business-market sales promotion: Help
cultivate buyers in organizations or
corporations who make purchase decisions
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
5
Reasons for the Growth of Sales
Promotion
•
•
•
•
•
•
Demand for greater accountability
Short-term orientation
Consumer response to promotions
Proliferation of brands
Increased power of retailers
Clutter
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6
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 Brand Promotion
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
7
Coupon
• Entitles a buyer to a designated
reduction in price for a product or service
Advantages
– Facilitates giving discount to pricesensitive consumers while selling at full
price to others
– Induces brand switching and repeat
purchases
– Timing and distribution can be controlled
by the manufacturer
– Gets regular users to trade up within a
brand array
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
8
Coupon
Disadvantages
– Timing of redemption cannot be
controlled
– Heavy redemption by regular brand
buyers reduces a firm’s profitability
– Handling, processing, and distribution
incur high costs
– Misredemption practices erode
profitability
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
9
Price-Off Deal
• Offers cents off merchandise at the P-OP through specially marked packages
Advantages
– Controllable by the manufacturer
– Affects a positive price comparison
against competitors
Disadvantage
– May cause inventory and pricing problems
for retailers
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
10
Premiums
• Items offered free, or at a reduced price,
with the purchase of another item
• Types
– Free premium: Provides consumers with
an item at no cost
– Self-liquidating premium: Requires
consumers to pay most of the cost of the
item received as a premium
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
11
Advertising Specialties
• Have a message placed on a useful item
that is given free to consumers
– With no obligation to make a purchase
• Help reinforce a company or brand name
with the target customer
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
12
Contests and Sweepstakes
Contests
Sweepstakes
• Consumers compete
for prizes based on skill
or ability
• Winners are
determined by judges
or based on who
comes closest to a
predetermined criterion
for winning
• Expensive to
administer
• Winners are
determined purely by
chance
• Consumers need only
to enter their names as
a criterion for winning
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
13
Limitations of Contests and
Sweepstakes
• There are complex legal issues involved
• Game gains focus and brand becomes
secondary
• Communicating a meaningful message
in the context of a game is not feasible
• Risk of errors in administration is high
and can create negative publicity
• May not project a prestigious image for
the brand
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
14
Sampling and Trial Offers
Sampling: Provide a consumer with an
opportunity to use a brand on a trial basis
with little or no risk
• Types
– In-store sampling: Popular for food products
and cosmetics
– Door-to-door sampling: Expensive but
effective if aimed at target segments in welldefined geographic areas
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
15
Sampling and Trial Offers
– Mail sampling: Samples are delivered
through the postal service
– On-package sampling: Samples are
attached to another product package,
targeted to current customers
– Mobile sampling: Logo-emblazoned
vehicles dispense samples to consumers at
various locations
Trial offers: Induce consumer trial use of a
brand, and are used for expensive items
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
16
Gift Cards
• Free or for-purchase debit cards that
provide the holder with a preset spending
limit
• Cards are designed to be colorful and
memorable
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
17
Firms use gift cards
as a way to draw
attention to the
brand and as a way
for loyal customers
to introduce their
friends to the
brand’s offerings
18
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Rebate
• Money-back offer requiring a buyer to
mail in a form requesting the money back
from the manufacturer
Advantages
• Increases the quantity purchased by
consumers
• Consumer redemption rate is low,
resulting in higher revenue for the
manufacturers
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
19
Frequency or Continuity Programs
• Offer discounts or free product rewards
for repeat purchase or patronage of the
same brand, company, or retailer
• Better suited for large firms
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
20
Sales Promotion Directed at the Trade
Channel and Business Markets
• Marketers adopt a push strategy
– Push strategy: Push a brand into the
distribution channel until it reaches the
consumer
• Objectives
– Gain initial distribution and shelf
placement
– Increase order size
– Encourage cooperation with consumermarket sales promotions
– Increase store traffic
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
21
Trade-Market Sales Promotion
Techniques
Incentives - Awards given to retailers for
reaching targeted sales levels
• Push money: Monetary reward offered to
salespeople for featuring a marketer’s
brand with shoppers
Allowances
• Merchandise allowances: Free products
offered as payments to the trade for setting
up and maintaining displays
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
22
Trade-Market Sales Promotion
Techniques
• Slotting fees: Direct cash payments made
to induce food chains to stock an item
• Bill-back allowances: Provide retailers a
monetary incentive for featuring a brand in
advertising or in-store displays
• Off-invoice allowance: Advertisers allow
wholesalers and retailers to deduct a set
amount from the invoice they receive for
merchandise
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
23
Trade-Market Sales Promotion
Techniques
Sales-training programs
• Provide training for retail store personnel
• Ensure factual information and persuasive
themes reach consumers at the P-O-P
Cooperative (Co-Op) advertising
• Provides money directly to retailers for
featuring company’s brand in local
advertising
• Manufacturers set specifications for the size
and content of an ad or send the template
for the ad
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
24
Here is an example of
co-op advertising by a
manufacturer in
support of a retailer
Hublot is being
featured by a
California retailer in a
magazine ad
Manufacturers provide
the ad template for the
retailer to run,
featuring the firm’s
brand
25
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Business-Market Sales Promotion
Techniques
Trade shows
• Related products from different manufacturers are displayed and
demonstrated to members of a trade
Business gifts
• Help build and maintain a close working relationship with suppliers
Premiums and advertising specialties
• Create awareness and add to the satisfaction of a transaction
Trial offers
• Lower buyer’s risk of making a commitment to a brand and help
attract new customers
Frequency programs
• Ideal form of promotion due to the high degree of travel associated
with business professions
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
26
Risks of Sales Promotion
•
•
•
•
•
Creating a price orientation
Borrowing from future sales
Risk of alienating customers
Managerial time and expense
Legal considerations
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
27
Point-of-Purchase Advertising
• Materials used in the retail setting to:
– Attract shoppers’ attention to a brand
– Convey primary brand benefits
– Highlight pricing information
• Objectives
– Draw attention to a brand in the retail
setting
– Maintain purchase loyalty among loyal
users
– Stimulate increased usage of the brand
– Stimulate trial use by other brands’ users
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
28
Types of Point-of-Purchase
Advertising and Displays
Short-term promotional displays: Used
for six months or less
Permanent long-term displays: P-O-P
presentation for more than six months
Options
•
•
•
•
Window and door signage
Counter/shelf unit
Floor stand and shelf talker
Mobile/banner
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
29
Types of Point-of-Purchase
Advertising and Displays
•
•
•
•
•
•
•
•
•
•
Cash register
Full line merchandiser
End-of-aisle display or gondola
Dump bin
Illuminated sign
Motion display
Interactive unit
Overhead merchandiser
Cart advertising and aisle directory
Retail digital signage
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
30
P-O-P Advertising
• In relation to mobile or location marketing
– P-O-P offers can be sent through mobile
devices
• In relation to trade and business markets
– Encourage retailers to support one
manufacturer’s brand over another
– P-O-P display can enhance the
atmosphere of a store and make the
shopping experience easier for customers
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
31
Support Media
Used to reinforce or supplement a
message being delivered via some other
media vehicle
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
32
Outdoor Signage and Billboard
Advertising
Advantages
Disadvantages
• Provides wide
exposure in specific
markets
• Size of a display
attracts more attention
• Offer around-the-clock
exposure
• Effective at
addressing an
immediate need or
desire
• Messages need to be
very brief
• Riding the boards to
assess locations
requires heavy
investment of time
and money
• Expensive medium
• Disapproved by
environmentalists
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
33
Transit Advertising
Advantages
• Effective for repetitive
message exposure
• Reach large numbers
of individuals in a
cost-efficient manner
• Allows for
demographic
matching of vehicle
with target audience
Disadvantages
• Not suitable for
lengthy messages
• May go unnoticed
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
34
Mass transit has become an advertising
vehicle too
35
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Aerial and Cinema Advertising
Aerial advertising: Involves airplanes
pulling signs or banners, skywriting, or
blimps
Cinema advertising: Ads that run in movie
theaters before the film and other
advertising appearing off-screen within a
theater
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
36
Directory Advertising
Advantages
• Act as the final link in
a buying decision
• Supplement
awareness-building
Disadvantages
• Availability of multiple
directories make this a
less effective medium
• Require long lead
times
• Do not support
creative execution
• Advanced technology
has overpowered this
medium
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
37
Packaging
• Container or wrapping for a product
• Promotional benefits to the advertiser
– Helps create brand awareness
– Can attract attention and induce the
shopper to examine the product
– Create a perception of value
• Color, design, and shape of a package
affect consumer perceptions of quality,
value, and image
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
38
Packaging
Promotional benefits of packaging
to the advertiser
• The package carries the brand name and
logo
• The package can communicate value
• The package can communicate image and
quality
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
39
An effective package
can attract attention in
the store and also
serve as a constant
brand name reminder
for the user
40
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.