Transcript MARKETING COMMUNICATIONS

Lecture 8
Promotional Strategies 4
Sales Promotion
Lecture Outline
 ISP/IPM Awards - Awards - Grand Prix Winners
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International sales promotion
Promotion across frontiers
Planning a campaign
Objectives
Activities
Developing a strategic approach
Evaluation
Regulation
Application of sales promotion in different countries
International Sales Promotion
 “The media and non-media marketing pressure
applied for a predetermined, limited period of
time at the level of consumer, retailer, or
wholesaler in order to stimulate trial, increase
consumer demand, or improve product
availability” (The Promotion Marketing Association,
PMA)
(Moriarty, Mitchell & Wells, 2012, 546)
International Sales Promotion
 Blue Chip Marketing- Promotional Marketing
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Specialist
The use of sales promotions is increasing worldwide
Support for advertising campaigns
Cost and clutter of media
Precise targeting
Tracking of promotional effectiveness
Standardisation is impossible
Everyone loves a bargain/freebie!
Promotions Across Frontiers
 There are few truly global campaigns
 The importance of conveying consistency has
never been higher
 The need to recognise variables: language, culture,
legislation, logistics, the internet, and evaluation
 Promotional objectives are different – plc
 The greatest strength of promotional marketing is
its flexibility and its ability to meet a client or
company’s specific needs in a particular market
Promotions Across Frontiers
 What do you hope to gain?
 The two key benefits of running a promotion
across different markets are consistency and cost-
efficiency in brand and company image
 Also important are economies of scale in
production and distribution, coupled with lower
marketing and advertising costs
Promotions Across Frontiers
 What are the needs of our clients?
 Customer harmony exists across borders, and
clients are therefore pushing agencies to deliver
cross-border campaigns
 However, there is nothing but diversity when it
comes to legislation covering promotion
(Hanson, 2002)
Routes to Market
 The easiest route is via a well-known property or
license e.g. Harry Potter, the Olympics
 Local culture and knowledge cannot be ignored
 In eastern Europe, consumers are still reluctant to
give out personal details
 In Japan and India, stores may be too small for
POP displays and sampling
Planning an International Campaign
 The stage of economic development is important
 There may be no legislative restriction, but sales
promotion tools are not widely used
 You need to assess retail structures, mechanics
such as coupons need good and honest trade
support
 Avoid premiums in less developed markets
Planning an International Campaign
 Consideration needs to be paid to campaign
packaging, manufacturing and shipping costs
 What data do you want to collect from the
campaign?
 How are you going to collect it and how will you
use that information to your advantage?
(Hanson, 2002)
What can Sales Promotions Achieve?
 Sales promotions encourage the consumer to buy a
specific brand, to buy more than one item, or buy a
preferred brand and sample another
 Promotions can also build demand, build brand
awareness, generate an impulse buy, motivate trial,
and encourage multiple purchases
(Gerwin, 2004)
The Task of Sales Promotion
 The main task of Sales Promotion is to encourage
the target audience to behave in a particular way,
often to buy a product
 Sales promotion offers buyers additional value, as
an inducement to generate an immediate sale
 These inducements can be targeted at consumers,
distributors, agents and members of the sales force
(Fill, 2009, p.538)
What can Sales Promotions Achieve?
 Sales promotions are more immediate than
advertising, and offer consumers something tangible
making it easier to evaluate
 Enhancements can be added to entice loyalty e.g.
frequent flier programmes
(Gerwin, 2004)
Factors affecting the increasing use of sales promotions in De
Pelsmacker, Geuens & Van den Bergh, 2010, 408
Figure 12.1
Figure 12.2
409
Basic types of sales promotions, in De Pelsmacker et al, 2010,
Sales Promotion
 3 MAIN CATEGORIES
 Customer promotions – premiums, gifts, prizes,
competitions
 Trade promotions – special terms, POS materials
 Salesforce promotions – incentive and motivation
schemes
 The 3 P’s – Price, Product, Prize
(See Smith & Taylor, 2004, pp. 355-385)
Objectives and target groups of consumer promotions in De
Pelsmacker et al, 2010, 410
Figure 12.3
Objectives
 CUSTOMER SALES PROMOTIONS
 Improve sales of existing products
 Encourage repeat purchase
 Encourage trial
 Counteract competitive marketing communications
 Increase product usage
Objectives
 CUSTOMER SALES PROMOTIONS
 Encourage brand loyalty
 Discourage brand switching
 Facilitate collection of database information
 Complement other marcoms “pull” activities
Objectives
 TRADE SALES PROMOTIONS
 Help introduce new product to the trade
 Encourage distribution penetration
 Increase allocation of shelf space
 Improve shelf display positioning
 Provide extra incentives over competing products
Objectives
 TRADE SALES PROMOTIONS
 Help stimulate sales force motivation
 Help overcome over-stocking problems or slow moving
lines
 Complement other marcoms “push” activities
Table 12.1
Consumer promotion tools in De Pelsmacker et al., 2010, 412
Sales Promotion Activities
 Sampling
 Couponing
 Premiums
 Money-off
 Bonus packs
 Banded packs
 Competitions/prize draws
 Cause related sales promotions
Sales Promotion Activities
 Merchandising/POS/demonstrations
 Information leaflets/packs and catalogues
 Loyalty schemes
 Contests and incentives
 Allowances – discounts, additional free products,
special terms
 Joint promotions
Table 12.3
Trade promotion tools in De Pelsmacker et al. 2010, 424
Matching Tools with Objectives
 Trial – sampling
 Retrial – coupon off next purchase
 Increase usage – collections, games, competitions
 Develop new uses – companion brand promotions,
publications, workshops
 Increase shelf space – discount, extended credit,
POS, advertising support
 Increase sales – competition, prize draw
 Goodwill – gifts, holidays, awards
Developing a Strategic Approach
 Identify what customers/prospects really want
 Identify the long term marketing and
communications objectives
 Create guidelines for each product or service
 Determine how much of the total marketing and
communications budget is available for sales
promotions
Developing a Strategic Approach
 Ensure there is support and commitment from
senior management so that sufficient management
expertise and funds are available for promotions to
be professionally carried out
 Develop a method of evaluation
 Plan and forecast the results
Evaluating Sales Promotions
 How good is the general idea?
 Will the sales promotion appeal to the target
audience?
 Is the idea unique or is the competition doing
something similar?
 Is the sales promotion presented clearly?
 How cost efficient and effective is the sales
promotion?
Are Sales Promotions Effective?
Source: De Pelsmacher et al., 2010
Sales Promotion in Hong Kong
 Most common promotional tools used in
supermarkets: price discounts, in-store
demonstrations, coupons, sweepstakes and
games, and BOGOF
 Consumers respond most to price discounts,
BOGOF and coupons
 BOGOF offers are more effective than coupons
 Sweepstakes and games are less effective as
consumers realise that the chance of winning a
substantial prize is slim
(Shi, Cheung & Prendergast, 2005)
Sales Promotion in Hong Kong
 Price discounts, BOGOF offers, and coupons
were found to be most effective for encouraging
stockpiling, purchase acceleration and
additional spending
 In-store demonstrations were found to be
effective mainly in encouraging product trial
 Consumers prefer tools that are simple and
need less involvement, while also being able to
provide transaction utility
Sales Promotion in Other Countries
 Kelloggs used samples and demonstrations to
enlighten customers about dry cereal and cold
breakfasts in Asia
 To Launch Budweiser in Great Britain, posters,
flags, pennants, T-shirts and sweatshirts were used
 Pfizer attracts wholesalers by sponsoring trips and
other events
(Onkvisit & Shaw, 2009, 525-526)
 In Brazil, gas delivery people are used to distribute
product samples to households by Nestle, Johnson
& Johnson and Unilever
(Czinkota & Ronkainen, 2010, 587)
Sales Promotion by Global Marketers
 To fight counterfeiting in China, Disney asked
participants to mail-in hologram stickers on
genuine products to win prizes
 Mars invited consumers in 200 countries to vote
whether a new M&M candy should be purple, aqua,
or pink
 To launch Orbit gum in the US, “field research
teams” distributed 7 million samples, dressed as
characters from the ad campaign
 Guinness organised a competition in Asia to select
a new bottle shape: options included bullhorn or
guitar
(Keegan & Green, 2011, 462)
Finally …
 Sales promotion is not restricted to the
stimulation of demand at the consumer level.
It may be used to gain middlemen’s support as
well
 Sales promotion is effective when a product is
first introduced to a market. It also works well
with existing products that are highly
competitive and standardised, especially when
they are of low unit cost and have high turnover
 Sales promotion is needed to gain the “extra
competitive advantage”
And …
 Some foreign retailers are reluctant to accept
manufacturers’ coupons because they fear that
they will not be reimbursed
 Consumers may review rebates, mail-in
coupons, and money-back guarantees with
suspicion, thinking that something must be
wrong with the product
(Onkvisit & Shaw, 2009, 525-526)
References
 Clow, K.E., & Baack, (2010) International Advertising, Promotion and
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Marketing Communications, 4e. Upper Saddle River, NJ: Pearson
Prentice Hall
Czinkota and Ronkainen (2010) Principles of International Marketing.
2e. Mason, OH: Cengage
De Pelsmacker, P, Geuens, M & Van den Bergh, J, (2010) Marketing
Communications, A European Perspective. 4e, Harlow: Pearson
Education
Fill, C., (2009) Marketing Communications, Interactivity, Communities
and Content. 5e. Harlow: Pearson Education
Gerwin, A.S. (2004) Sales Promotion Planning, Point of Purchase
Advertising International. Retrieved March 15, 2011 from
http://www.warc.com
Hanson, M. (2002) Globalisation promotions across frontiers, Admap, ,
February, Issue 425
References
 Keegan, W.J. & Green, M.C., (2011) Global Marketing, 6e., Harlow:
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Pearson Education
Moriarty, S., Mitchell, N., & Wells, W., (2012) Advertising and IMC, 9e.
Upper Saddle River, NJ: Pearson Education
Shi, Y., Cheung, K., & Prendergast, G. (2005) Behavioural Response to
Sales Promotion Tools, A Hong Kong Study, International Journal of
Advertising, Vol. 24, No. 4. Retrieved March 15, 2011 from
http://www.warc.com
Smith, P., and Taylor, J., (2004) Marketing Communications, An
integrated approach. 4e. London: Kogan Page
White, R. (2008) Sales promotion and the brand, Warc Best Practice,
July. Retrieved March 15, 2011 from
http://www.warc.om/Content/PrintViewer.aspx?MasterContentRef=bf
dda7cl-26f4-4
White, R. (2002) Sales promotion and the brand, Admap, Issue 430,
Iuly. Retrieved March 15, 2011 from http://www.warc.com