Transcript Sales Promotion Objectives

LECTURE-26
Sales Promotion & Packaging
Topic Outline
 What is “Sales Promotion”
 How do sales promotions add value to a
brand?
 What are consumer sales promotions
designed to accomplish and what are
their strengths and limitations?
 What role does packaging play when
consumers make brand decisions?
Chapter Perspective
Sales promotion and packaging help move prospects
and customers through the decision process started by
other marketing communication functions
Awareness
Interest
Public Relations
Direct Marketing
Website
Desire
Action
Sales Promotion
Packaging
Sales Promotion
Sales promotion refers to the short-term
incentives to encourage purchases or
sales of a product or service:
 Consumer promotions
 Trade promotions
 Sales force promotions
Two Types of Sales Promotion
Consumer Promotion
The use of incentives
to motivate end users
to purchase a brand
and thus pressure
retailers to stock that
brand
• Used by marketers as
part of a pull strategy
Trade Promotion
The use of
incentives to
motivate the buying
and reselling of
products
• Used as part of a
push strategy
Sales Promotion
Rapid Growth of Sales Promotions
 Product managers are under pressure to
increase current sales
 Companies face more competition
 Competing brands offer less
differentiation
 Advertising efficiency has declined due
to rising costs, clutter, and legal
constraints
 Consumers have become more dealoriented
Sales Promotion
Sales Promotion Objectives
 Setting sales promotion objectives
includes using:
 Consumer promotions
 Trade promotions
 Sales force promotions
Sales Promotion Objectives
Increase Trial and
Repurchase
Increase Frequency
And/or Quantity of
Purchases
Reinforce Brand
Image/Strengthen
Brand Relationships
Counter Competitive
Offers
Objectives
Extend the Use of a
Brand
Cross-sell
Build Customer
Databases
Increase Level of
Customer Retention
Sales Promotion Tools
Premiums
Sweepstakes,
Contests, and
Games
Specialties
Coupons
Tools
Price
Reductions
Sampling
Rebates
Sales Promotion
Major Sales Promotion Tools
Consumer Promotion Tools
Samples offer a trial amount of a product
Coupons are certificates that give buyers a
saving when they purchase specified
products
Rebates are similar to coupons except that the
price reduction occurs after the purchase
Price packs offer consumers savings off the
regular price of a product
Sales Promotion
Major Sales Promotion Tools
Consumer Promotion Tools
Premiums are goods offered either for free
or at a low price
Advertising specialties are useful articles
imprinted with the advertiser’s name, logo,
or message that are given as gifts to
consumers
Point-of-purchase promotions include
displays and demonstrations that take
place at the point of sales
Sales Promotion
Major Sales Promotion Tools
Consumer Promotion Tools
Contests, sweepstakes, and games give
consumers the chance to win something—
such as cash, trips, or goods—by luck or
through extra effort
 Contests require an entry by a consumer
 Sweepstakes require consumers to submit
their names for a lucky draw
 Games present consumers with something
that may or may not help them win a prize
 Event marketing
Sales Promotion
Major Sales Promotion Tools
Trade Promotion Tools
Discount
Allowance
Free goods
Specialty
advertising
Sales Promotion
Major Sales Promotion Tools
Business Promotion Tools
Conventions and trade shows are effective
to reach many customers not reached
with the regular sales force
Sales contests are effective in motivating
salespeople or dealers to increase
performance over a given period
Sales Promotion
Developing the Sales Promotion Program





Size of the incentive
Conditions for participation
Promote and distribute the program
Length of the program
Evaluation of the program
Promotion In Action: Catalina Coupons
Promotion In Action: Catalina Coupons
Challenge:
Answer:
Results:
Personalize consumer sales promo offers
Sophisticated product by Catalina that checks
a consumer’s buying history and prints out
personalized coupons at the check-out for:
• $1 off 3 jars to reward a “loyal customer”
• 50¢ off 1 jar to convert a “switcher” from
another brand
• $1 off 1 jar to motivate a “never buyer” to try
the brand
This type of service has become very common
in supermarkets throughout the nation
Think About It
Fly to NYC for $149*
*one-way based on a round-trip purchase
½ price sale*
*buy one at full price and get ½ off a second of
equal or lesser value
Save up to 70%*
*a few racks are on sale for 70% off; other sale
items are 20-30% off
• Are these offers ethical?
• What do you think about firms that use them?
Consumer Promotion Strategies
Partnership
Strategies
Cross promotion:
• Two or more products are
promoted together, such as
cheese and crackers
• Brands team up to boost their
image power
• They also share in costs
A CBS/Campbell’s Soup Cross Promotion
+
Consumer Promotion Strategies
Loyalty
Strategies
Loyalty marketing:
• Using promotions specifically
designed for customer retention
• Example: punch card
offering a free coffee (“buy
10 and get the 11th one
free”)
An Example of Marriott Hotels Loyalty Promotion
+
What Are Consumer Sales Promotions
Designed To Accomplish?
Strengths
Limitations
• Good at generating
trial
• Drives repurchase
and increased
purchase frequency
• Strengthens
customer
relationships
 Can be copied by
competitors
 Most promotions are
not profitable
 Overuse can lead to
lower brand loyalty
and profits
Vs.
Packaging
• Often the “last ad seen” for a brand
• Critical for packaged goods
• Heavily promoted products that are usually sold
through food and drug stores in small packages and
carry a low unit price
Insight: Generic Product Packaging
Generic products often come in plain white
packages with black lettering that gives a basic
product description (e.g. paper towels).
Although they are often referred to as
“unbranded,” they are in fact fairly distinctive.
Their unique package design allows customers
to recognize them easily, but more importantly,
the package design cues a certain association
(low-price) and a bundle of perceptions that
differentiates them from competing and
traditional brand-name products.
Packaging is Critical to Make Brands Stand Out
in The Crowded Cereal Aisle
Tales From the Real World
Packaging consultants and agencies are now
typically involved in some of the earliest stages
of planning for new or improved products in the
real world.
This early input can lead to unique aspects of a
brand’s package that may even become the
most important aspects of the brand’s MC
program—like the new Heinz squeezable
ketchup bottle.
What Role Does Packaging Play?
Strengths
• Protects the product
• Free media before,
during and
during,
andafter
after
purchase
• Adds
Add value
valueand
and
convenience
Limitations
Vs.
 Can be copied by
competitors
 Can contribute to
waste explosion
Final Note:
While advertising often gets credit
for being the most glamorous part of
MC, sales promotion and packaging
offer the opportunity of being the
most inventive areas—and those
best suited to move consumers
through the final steps in the buying
decision toward purchase
Bibliography
 Principles of Marketing by Philip Kotler & Gary Armstrong
Fifteenth Edition, Published by Prentice Hall
 Marketing Management – A South Asian Perspective
by Philip Kotler, Kevin Lane Keller, Abraham Koshy &
Mithileshwar Jha, 13th Edition, Published by Pearson
Education, Inc.
 Principles and Practices of Marketing by Jobber, D. 4th
edition, McGraw Hill International.
 Principles of Advertising & IMC by Tom Duncan 2nd
Edition, Published by McGraw-Hill Irwin.
The End
“Never deprive someone of
hope;
it might be all they have”