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Chapter16a
- 2. Learning Objectives • To understand the role of sales promotion in a company’s integrated marketing communications program and to examine why it is increasingly important. • To examine the various objectives of sales promotion programs. • To examine the types of consumer and trade-oriented sales promotion tools and factors to consider in using them. • To understand how sales promotion is
- 3. Sales Promotion “A direct inducement that offers an extra “A direct inducement that offers an extra value or incentive for the product to the sales value or incentive for the product to the sales force, distributors, or the ultimate consumer force, distributors, or the ultimate consumer with the primary objective of creating an with the primary objective of creating an immediate sale.” immediate sale.” An extra An extra incentive to buy incentive to buy Targeted to Targeted to different parties different parties A tool to A tool to speed up sales speed up sales
- 4. Sales Promotion Vehicles Consumer-Oriented Trade-Oriented Samples Samples Contests, incentives Contests, incentives Coupons Coupons Trade allowances Trade allowances Premiums Premiums Point-of-purchase displays Point-of-purchase displays Contests/sweepstakes Contests/sweepstakes Training programs Training programs Refunds/rebates Refunds/rebates Trade shows Trade shows Bonus Packs Bonus Packs Cooperative advertising Cooperative advertising Price-off deals Price-off deals Frequency programs Frequency programs Event marketing Event marketing
- 5. Long-Term Budget Allocations 100% 90% 80% 70% 60% Consumer Promotions Media Advertising 50% 40% 30% 20% Trade Promotions 10% 0% ‘94 ‘95 ‘96 ‘97 '98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 % of Total Promotional Dollars, 3-yr Moving Average
- 6. Media Often Delivers a Promotion Message
- 7. Sales Promotion Increases Growing power of retailers Growing power of retailers Reasons Reasons Declining brand loyalty Declining brand loyalty Increased promotional sensitivity Increased promotional sensitivity Brand proliferation Brand proliferation Fragmentation of consumer markets Fragmentation of consumer markets Short-term focus of marketers Short-term focus of marketers Increased accountability Increased accountability Competition Competition Clutter Clutter
- 8. Consumer Franchise-Building Promotions Promotional Objectives Promotional Objectives Communicate distinctive Develop and Communicate distinctive Develop and brand attributesreinforce brand reinforce brand brand attributes identity identity Build long-term Build long-term brand preference brand preference Techniques and Practices Techniques and Practices Sweepstakes & Sweepstakes & “Frequency” programs contests to build “Frequency” programs contests to build encourage repeat purchase increase equity, encourage repeat purchase increase equity, involvement involvement Premium offers Premium offers that reinforce the that reinforce the brand image and brand image and help build equity help build equity
- 9. Non franchise-Building Promotions Objectives Objectives Accelerate the Accelerate the purchase decision purchase decision process process Generate an Generate an immediate sales immediate sales increase increase Limitations Limitations Do not identify Do not identify unique brand unique brand features features Do not contribute Do not contribute to brand identity or to brand identity or image image
- 10. Contests Can Build Brand Equity
- 11. Non franchise-Building Promotions May Include .. .. .. May Include Price-off deals Price-off deals Bonus packs Bonus packs Rebates or Rebates or refunds refunds Shortcomings Shortcomings Trade Trade promotions promotions benefits may not benefits may not reach customers reach customers If they do, they If they do, they may lead only to may lead only to price reductions price reductions Customers may Customers may “buy price” “buy price” rather than rather than brand equity brand equity
- 12. Objectives of Consumer-Oriented Promotions To increase To increase consumption of consumption of an established an established brand brand To obtain trial To obtain trial and purchase and purchase Objectives Objectives Enhance IMC Enhance IMC efforts and build efforts and build brand equity brand equity To defend To defend (maintain) (maintain) current current customers customers To target a To target a specific segment specific segment
- 13. Sampling Sampling Works Best When Sampling Works Best When The products The products are of relatively are of relatively low unit value low unit value The product can The product can be broken into a be broken into a small piece or size small piece or size that reflects the that reflects the full features and full features and benefits benefits The purchase The purchase cycle is cycle is relatively short relatively short
- 14. Sampling Methods Door-to-door Door-to-door Methods Methods Direct mail Direct mail In-store In-store On package On package Event Event Newspaper/magazine insert Newspaper/magazine insert Internet sites Internet sites
- 15. Distributing Samples With Newspapers
- 16. Armor All Uses On-Package Samples
- 17. Couponing The oldest and most widely used sales promotion tool Nearly 240 billion distributed each year in the US 85% of consumers use coupons; 21% use them regularly
- 18. Pros and Cons of Coupons Advantages Disadvantages Appeals to price sensitive Appeals to price sensitive consumer consumer Hard to tell how many Hard to tell how many consumers use them and consumers use them and when when Can offer price break Can offer price break without retailers co-op without retailers co-op Often used by loyal Often used by loyal consumers who may consumers who may purchase anyway purchase anyway Effective way to induce Effective way to induce trial of products trial of products Declining redemption rates Declining redemption rates and high costs of and high costs of couponing couponing Can be way to defend Can be way to defend market share and market share and encourage repurchase encourage repurchase Misredemption and fraud Misredemption and fraud
- 19. Coupons are Most Often Used With… Disposable Disposable Diapers Diapers Cereal Cereal Laundry Laundry Soap Soap
- 20. Coupon Distribution Other Magazines In / On Pack Direct Mail Newspaper Coop Newspaper ROP Freestanding Inserts
- 21. The Most Popular Coupons are FSIs
- 23. Valpak Enhances Value of Coupons
- 24. Types of Coupons In/on-pack In/on-pack In-store In-store Bounce-back Bounce-back Tear-off pads Tear-off pads Cross-ruff Cross-ruff Handouts Handouts Instant Instant Dispensers Dispensers Register printout Register printout
- 25. Coupons are Available Electronically
- 26. Premiums An offer of an item, merchandise, or An offer of an item, merchandise, or service, free or at a low cost, that is service, free or at a low cost, that is an extra incentive for customers an extra incentive for customers Types of Premiums Types of Premiums Free: Free: Only requires purchase Only requires purchase of the product of the product Self-liquidating: Self-liquidating: consumer required to consumer required to pay some or all of the pay some or all of the cost of the premium cost of the premium
- 27. Airline Miles are a Popular Incentive
- 28. More Consumer-Oriented Promotions Contests and Contests and sweepstakes sweepstakes Refunds and Refunds and rebates rebates Bonus packs Bonus packs Loyalty programs Loyalty programs Price-off Deals Price-off Deals Event marketing Event marketing
- 29. Trade Oriented Promotions Objectives Objectives Obtain distribution for new Obtain distribution for new products products Maintain support for Maintain support for established brands established brands Encourage display of Encourage display of products products Build retail inventories Build retail inventories
- 30. Types of Trade Oriented Promotions Contests and incentives Contests and incentives Types Types Co-op Advertising Co-op Advertising Trade allowances Trade allowances POP displays POP displays Buying Buying Sales training Sales training Promotional Promotional Trade shows Trade shows Slotting Slotting
- 31. Coordinating Sales, Advertising, IMC Tools Budget allocation Coordination of themes Media support and timing
- 32. Problems With Sales Promotion
- 33. Aspects of Consumer Promotions Economic Economic Informative Informative Affective Affective
Notas do Editor
- Relation to text This slide relates to material on pp. 509-510 of the text and provides a definition of sales promotion. Summary Overview Sales promotion is an inducement or incentive to the sales force, distributors, or ultimate customer with the primary objective of creating immediate sales. There are three important aspects of sales promotion: An extra incentive to buy, such as coupons, rebates, premium provide extra reason to buy Acceleration tools to speed up sales and shorten the purchase cycle Targeting different consumers or businesses Use of this slide This slide can be used to introduce sales promotion and its role in the overall IMC program. Attention should be given to these three important aspects of sales promotion.
- Relation to text This slide relates to material on p. 510 and Figure 16-1 of the text. Summary Overview Sales promotion can be broken into two major categories, consumer-oriented and trade-oriented. This slide shows the types of activities related to each. Consumer-oriented promotion Samples Coupons Premiums Contests/sweepstakes Refunds/rebates Bonus packs Price-off deals Frequency programs Event marketing Trade-oriented promotion Contests and dealer incentives Trade allowances Point-of-purchase displays Training programs Trade shows Cooperative advertising Consumer-oriented promotions are generally used as part of a push channel strategy while trade-oriented promotions are part of a pull strategy. Use of this slide Use this slide to show the types of promotion vehicles that are used for consumer and trade-oriented promotions.
- Relation to text This slide relates to material on pp. 510-511 of the text. Summary Overview This slide shows the allocation of media advertising, trade promotion, and consumer promotion over time, among consumer packaged goods companies. The graph shows that the percentage of a typical marketers’ budget that is allocated to consumer and trade promotion has increased, while allocations to media advertising have declined. Media advertising used to dominate the budget, but now marketers spend 60-75% of their budgets on sales promotion. Use of this slide This slide can be used to discuss the growth of sales promotion and the changes in the allocation of the promotional budget. The reasons for this growth are discussed in the next slide.
- Relation to text This slide relates to the material on pp. 510-511 and Exhibit 16-2. Summary Overview This slide shows a print ad for the Chevy Avalanche truck that promotes the “Outdoor Adventure Sweepstakes.” A significant amount of the monies that marketers allocate to media advertising is spent on ads that deliver messages promoting contests, games, sweepstakes, rebates and other promotional offers. Surveys have shown that marketers devote about 17 percent of their ad budgets to deliver promotional messages. Use of this slide This slide can be used to demonstrate how marketers use often use media advertising to deliver a sales promotion message. You might also note how the “Outdoor Adventure Sweepstakes” is an example of a franchise-building promotion that contributes to the image of the Avalanche as a rugged vehicle for the outdoors.
- Relation to text This slide relates to material on pp. 511-516 of the text. Summary Overview This slide summarizes the reasons for the growth in sales promotion. These are: Growing power of retailers. Manufacturers used to have most of the power, now retailers through technology, consolidation, and private labeling have more. Declining brand loyalty. Consumers are purchasing more on the basis of price and value. Increased promotional sensitivity. Consumers want to save money and respond well to promotions that provide them the opportunity to do so. Brand proliferation. Many new brands offer little differentiation. Fragmentation of consumer markets. Traditional mass media advertising has become less effective and promotions are a way to reach market segments. Short-term focus. Sales promotion is seen as a way of generating an immediate increase in sales. Increased accountability. Managers are under pressure to produce sales results. Competition. Promotions are seen as way to gain a competitive advantage. Clutter. Promotional offers can break through the clutter and attract attention. Another reason for the increase in spending is that the promotion industry has become more sophisticated and plays a more strategic role in the IMC program of many companies. Use of this slide This slide can be used to discuss the reasons for the increase in the use of sales promotion and the associated shift away from mass media advertising.
- Relation to text This slide relates to material on pp. 517-518 of the text. Summary Overview Consumer franchise-building (CFB) promotions are sales promotion activities that: Communicate distinctive brand attributes Contribute to the development and reinforcement of brand identity Build long-term brand preferences Some of the CFB techniques and practices include: Frequency programs that encourage repeat purchases Contests and sweepstakes and increase involvement with the brand and help build equity Premium offers that are consistent with the brand image help reinforce and/or build equity For years franchise or image building was viewed as the exclusive realm of advertising, and sales promotion was used only to generate short-term sales increases. But now marketers are recognizing the image-building potential of sales promotion and paying attention to its consumer franchise-building value. Use of this slide This slide can be used to introduce consumer franchise building promotions.
- Relation to text This slide relates to material on p. 517-518 of the text. Summary Overview Nonfranchise-building promotions are designed to: Accelerate the purchase decision process and Generate an immediate increase in sales. These activities generally do not communicate information about a brand’s unique features or the benefits of using it, so they do not contribute to the building of brand identity and image. Price-off deals, bonus packs, and rebates are examples of non-FB sales promotion techniques. Trade promotions are criticized for being nonfranchise-building because many of the promotional discounts given to the trade are never passed on to the consumer. Use of this slide This slide can be used to introduce nonfranchise-building promotions.
- Relation to text This slide relates to the material on p. 522 and Exhibit 16-9 of the text. Summary Overview Marketers are recognizing the value of contests to create interest and excitement in their brands, and to get consumers to become more involved with them. When the Georgia-Pacific Corporation acquired the Brawny paper towel brand a few years ago, the company used a contest to help rebuild the struggling brand. The goals of the contest were to build brand equity by leveraging the Brawny man icon, as well as to gain insight into the modern woman’s opinions as to what makes a man “brawny.” The company’s promotional agency developed the “Do you know a Brawny Man?” contest, asking women to send in a photo and a 150-word description explaining why their guy is as rugged as the product. Use of this slide This slide can be used to show an example of how sales promotion tools, like this contest, help build brand equity.
- Relation to text This slide relates to material on p. 518 of the text. Summary Overview This slide summarizes the various nonfranchise-building techniques available to marketers and the shortcomings of using them. The techniques include: Price-off deals Bonus packs Rebates/refunds The shortcomings of non-FB promotions include: Trade promotion benefits may not reach customers If they do, they may lead only to price reductions Customers may “buy price” rather than brand equity Short-term non-FB promotions have their place in a firm’s promotional mix, particularly when competitive situations call for them. But their limitations must be recognized when a long-term, brand building strategy for a brand is needed. Use of this slide This slide can be used to discuss the concept of nonfranchise-building promotions, list some examples, and review the shortcomings of these techniques.
- Relation to text This slide relates to material on pp. 518-522 of the text. Summary Overview Objectives of consumer-oriented sales promotions are to: Obtain trial and purchase Increase consumption of an established brand Defend (maintain) current customers Target a specific segment Enhance IMC efforts and build brand equity Although the basic goal of most consumer-oriented sales promotion programs is to encourage purchases, these other objectives for both new and established brands should be considered. Use of this slide This slide can be used to discuss the objectives that companies hope to achieve by using them.
- Relation to text This slide relates to material on pp. 522-523 of the text. Summary Overview Sampling involves giving the consumer some quantity of the product at no charge to induce trial. There are three criteria for an effective sampling program. First, the products are relatively low unit value, so samples do not cost much. Second, the product can be broken into a small piece or size that reflects the full features and benefits. And third, the purchase cycle is relatively short so the consumer can purchase in relatively short time period. Manufacturers of packaged-goods products, such as food, health care items, cosmetics, and toiletries, are heavy users of sampling because their products meet the three criteria for an effective sampling program. As a sales promotion technique, sampling is commonly used to introduce a new product or brand to the market. Use of this slide This slide can be used to discuss sampling as a sales promotion technique.
- Relation to text This slide relates to material on pp. 523-524 of the text. Summary Overview A basic decision of the brand or sales promotion manager is how the sample will be distributed to consumers. Choices include: Door-to-door Direct mail In-store sampling On package At events With newspapers or magazines Through Internet sites The choice of a sampling method has two important considerations, the cost of distribution, and the method that will be used to control who receives the sample. Use of this slide This slide can be used to discuss the various ways samples can be distributed to the consumer.
- Relation to text This slide relates to the material on pp. 523-524 and Exhibit 16-10. Summary Overview Polybags are used by many newspapers to distribute samples. They provide a method for delivering the sample as well as an attention getting message that will be seen when people pick up their paper. The San Diego Union Tribune newspaper promotes the use of polybags to distribute samples, and includes this ad in its media kit. Use of this slide Use this slide to explain how samples can be delivered directly to a consumer’s residence by distributing them with newspapers.
- Relation to text This slide relates to the material on pp. 523-524 and Exhibit 16-11. Summary Overview This slide shows how ArmorAll uses on-package sampling for its automotive care products. Small packages of car cleaner and car wash are attached to the package of ArmorAll protectant, which is the company’s primary product. This sampling method makes it possible for consumers who purchase ArmorAll protectant to try other products made by the company and hopefully become users of those products as well. Use of this slide This slide can be used to show how on-package sampling is used by marketers.
- Relation to text This slide relates to material on p. 524 of the text. Summary Overview The most effective sales promotion tool is the cent-off coupon. They are the oldest and most widely used sales promotion tool, and nearly 260 billion are distributed each year in the United States. About 75% of consumers use coupons, and 21% use them regularly. Use of this slide This slide can be used to introduce coupons as a sales promotion tool. More detailed discussion of coupons will follow.
- Relation to text This slide relates to material on pp. 525-526 of the text which discusses coupons. Summary Overview Coupons are the most popular sales promotion tool for both new and established products, and they have many advantages, including: Their appeal to price-sensitive consumers Being able to offer a price break without involving the retailers co-op Inducing trial of new or existing products Defense of market share and encourage repurchase Disadvantages of coupons include: The difficulty of determining how many consumers will use coupons and when They are often used by loyal consumers who may purchase anyway Declining redemption rates High costs Misredemption and fraud Use of this slide This slide can be used to discuss the advantages and disadvantages of coupons.
- Relation to text This slide relates to material on p. 525 of the text. Summary Overview Coupons are most often used to promote disposable diapers, followed by cereal, detergent, and deodorant. Product categories where coupons are used the least are carbonated beverages, candy, and gum. Use of this slide This slide can be used to discuss the use and redemption of coupons in various product categories.
- Relation to text This slide relates to material on p. 526 of the text. Summary Overview This slide shows the various ways coupons are disseminated to consumers. Distribution through newspaper freestanding inserts (FSIs) is by far the most popular method, accounting for 87% of all coupons distributed. This is due to the availability of high quality, four-color graphics, competitive distribution costs, national same-day circulation, market selectivity, and the fact they can be competition free due to category exclusivity. Use of this slide This slide can be used to discuss the distribution of coupons to consumers.
- Relation to text This slide relates to the material on pp. 526-528, which discusses coupon distribution methods. Summary Overview This slide shows a Free Standing Insert type of coupon used by Chicken of the Sea to promote various seafood products. FSIs are the most popular method for delivering coupons to consumers, and they are usually delivered through inserts in the Sunday paper. Nearly all coupons are distributed through FSIs. However, this creates a clutter problem. Most consumers ignore the FSI inserts or do not take the time to go through them thoroughly. However, consumers who use coupons will go through the FSIs carefully and clip coupons of brands that they use or might be interested in trying. Use of this slide Use this slide to show an example of an FSI coupon and to engage students in a discussion of coupon distribution methods.
- Relation to text This slide relates to material on pp. 526-527 and Figure 16-3 of the text. Summary Overview This slide shows the coupon redemption rates of health, beauty, and grocery products by media type. The highest coupon redemption rates are instant on-package coupons, electronically dispensed handouts, and on-shelf coupons. Although freestanding inserts are the most poplar method of distributing coupons, the redemption rate is relatively low. The coupons with the highest rates of redemption are those available at the point of purchase. The low redemption rate of freestanding insert coupons may be a result of clutter in the Sunday newspaper and the effort required to cut them out and save them for a shopping trip. Use of this slide This slide can be used to discuss the redemptions rates of coupons given the various media they are distributed through.
- Relation to text This slide relates to the material on p. 526 and Exhibit 16-33. Summary Overview Valpak Direct Marketing Systems promotes the Valpak blue envelope, which distributes coupons and other promotional offers to consumers in more than 50 million homes. This ad promotes the value of the coupons inside. Use of this slide This slide can be used to discuss how coupons are distributed though direct mail companies such as Valpak Direct Marketing Systems. It can also be as part of a discussion of how Valpak uses advertising to enhance consumers perceptions of the value of the offers that arrive in the blue envelope.
- Relation to textThis slide relates to pp. 528-529 of the text. Summary OverviewPlacing coupons either inside or on the outside of the package is a distribution method that accounts for just over 1 percent of the coupons distributed. Bounce-back coupons are redeemable for the next purchase, and are an incentive to repurchase the brand. Cross-ruff coupons are redeemable on the purchase of a different product, usually by the same company Instant coupons are attached to the package so it can be redeemed at the time of purchase In-store coupons come in many forms and can be found in various locations: Tear-off pads Handouts On-shelf and electronic dispensers Register printouts, based on products being scanned for purchase. Use of this slideUse this slide to discuss the types of coupons that are commonly found in stores.
- Relation to textThis slide relates to page 530 and Exhibit 16-16. Summary OverviewSome marketers and retailers now use the Internet as a medium for distributing coupons, and several companies now offer online couponing services, including Valpak. Consumers can log onto the Web site, enter their Zip code, choose from a list of participating grocery stores in their area, and then download coupons. Another way to distribute coupons is via mobile couponing, where coupons are sent directly to mobile phones. Cellfire, show on this slide, distributes coupons to the mobile devices of consumers who sign up for its service. TGI Friday, Subway, Papa John’s, and several music and video stores are already working with Cellfire. Use of this slideUse this slide when discussing the electronic methods by which coupons are available today.
- Relation to text This slide relates to material on pp. 530-532 of the text, which discusses premiums. Summary Overview This slide defines a premium as an offer of an item, merchandise, or service, either free or at a low cost, that is an extra incentive for customers. There are two basic types of premiums: Free premiums are small gifts or merchandise that is included in the product package. Self-liquidating premiums require the customer to pay for some or all of the cost of the premium. Package carried premiums have high impulse value and provide an extra incentive to buy the product. Free premiums are popular in the fast food restaurant industry, and companies like McDonalds and Burger King use premiums in their kids meals to attract children. Self-liquidating premiums are designed, not necessarily to make money, but to cover costs and offer value to the consumer. Use of this slide This slide can be used to introduce premiums as a sales promotion tool.
- Relation to text This slide relates to the material on pp. 531-532 and Exhibit 16-17 of the text. Summary Overview This slide shows a trade ad from American Airline’s AAdvantage Marketing Programs. It is targeted toward marketers, encouraging them to use AAdvantage miles as a promotional incentive. American Airlines launched its AAdvantage frequent flier program in 1981 and it has become the largest loyalty program of any kind, with over 45 million members. This program, along with others that United offers, have made airline miles a promotional currency. Airlines make more than $2 billion each year selling miles to other marketers, who use them as a promotional incentive for hotels, rental cars, phone service, and a variety of other products and services. Use of this slide This slide can be used to discuss the use of airline miles as a premium incentive.
- Relation to textThis slide relates to pp. 532-539 of the text. Summary OverviewContests and sweepstakes are an increasingly popular consumer-oriented promotion because they generate excitement among consumers who have a “pot of gold” mentality. Refunds, also known as rebates, are offers by the manufacturer to return a portion of the product purchase price, usually after the consumer supplies some proof of purchase. Consumers are generally receptive to rebate offers, particularly as the size of the savings increases. Rebates enhance the likelihood of repeat purchase of the brand. Bonus packs offer the consumer an extra amount of a product at the regular price by providing larger containers or extra units. Price-off deals simply reduce the price of the product, with the reduction typically printed right on the packaging. Loyalty programs are one of the fastest-growing areas of sales promotion. They offer consumers the ability to accumulate points for purchasing their products or services. The points can then be traded for some sort of reward. Event marketing is a type of promotion where a company or brand is linked to an event or where a themed activity is developed fro the purpose of creating experiences for consumers and promoting a product or service. Use of this slideUse this slide to present additional types of consumer-oriented promotions.
- Relation to textThis slide relates to pages 540-542. Summary OverviewLike consumer-oriented promotions, sales promotion programs target to the trade should be based on well-defined objectives and measurable goals. Typical objectives include: Obtaining distribution and support for new products Maintaining support for established brands Encouraging retailers to display established brands Building retail inventories Use of this slideUse this slide to discuss the objectives of trade-oriented sales promotions.
- Relation to textThis slide relates to pages 542-548 of the text. Summary OverviewManufacturers use a variety of trade promotion tools as inducements for wholesalers and retailers. These promotions include contests and incentives, trade allowances, displays and point-of-purchase materials, sales training programs, trade shows and co-op advertising. Use of this slideUse this slide to point out the types of incentives that manufacturers use to get wholesalers and retailers to treat them, and their products, favorably.
- Relation to textThis slide relates to pages 549-550 of the text. Summary OverviewSales promotion techniques work best in conjunction with advertising and other integrated marketing tools. When properly planned and executed to work together, advertising and sales promotion can have a synergistic effect much greater than that of either promotional mix alone. Proper coordination of sales promotion with other IMC tools is essential if the firm is to take advantage of the opportunities offered by each, and get the most out of its promotional budget. Use of this slideUse this slide when explaining the importance of coordinating all your sales, advertising, and IMC tools.
- Relation to textThis slide relates to Summary OverviewConsumer and trade promotions can be an effective tool for generating short-term increases in sales. This is an easier route to profitability than is building the brand’s image over time. However, sales promotions are becoming so over used that they can be detrimental to a brand. For example: A brand that is over-promoted may lose perceived value. According to attribution theory, consumers who consistently purchase a brand because of a coupon of price-off deal may attribute their behavior to the promotional incentive, rather than to a favorable attitude toward the brand. If a promotion is successful, competitors may copy it. Once everyone is using the sales promotion, profit margins fall, and it is hard for any one firm to hop off the promotional bandwagon. This is a sales promotion trap. In many parts of the country, supermarkets have gotten into the trap of doubling or even tripling cents-off coupons. Fast-food chains have fallen into the trap of the “dollar menu.” Use of this slideUse this slide to explain some of the drawbacks of using sales promotions. Also point out that marketers must be careful not to damage the brand franchise with sales promotions, or get the firm in a promotional war that erodes profit margins and threatens the company’s long-term existance.
- Relation to textThis slide relates to page 552 of the text. Summary OverviewThere are three aspects to consumer promotions; economic, informative, and affective. In addition to economic effects, marketers must consider the information and signals a promotional offer conveys to the consumer, as well as the affective influences. These include the consumer feelings and emotions aroused by exposure to a promotion or associated with purchasing the brand or the company that is offering a deal. Use of this slideUse this slide to explain that, by consider all of these effects, managers can design and communicate consumer promotions more efficiently and effectively.