2. Sales Promotion
“A direct inducement that offers an extra
value or incentive for the product to the sales
force, distributors, or the ultimate consumer
with the primary objective of creating an
immediate sale.”
An extra A tool to
incentive to buy speed up sales
Targeted to
different parties
6. Nonfranchise-Building (non-FB) Promotions
Non-FB Promotional
Objectives
Accelerate the Generate an
purchase decision immediate sales
process increase
Non-FB Promotions . . .
Do not identify Do not contribute to
unique brand brand identity or
features image
7. Nonfranchise-Building (non-FB) Promotions
Non-FB Promotions May
Include . . .
Rebates or
Price-off deals Bonus packs
refunds
Non-FB Promotions
Shortcomings
Trade promotions If they do, they Customers may
benefits may not may lead only to “buy price” rather
reach customers price reductions than brand equity
8. Objectives of Consumer-Oriented
Sales Promotion
To increase
To increase
consumption of
consumption of
an established
an established
brand
brand
To defend
To obtain trial (maintain)
and purchase current
Objectives customers
Enhance IMC
To target a
efforts and build
specific segment
brand equity
9. Sampling
Sampling Works Best
When
The purchase
The products are
cycle is
The products divisible and can
relatively short
are of relatively be broken into
so the
low unit value, small sizes that
consumer can
so samples can reflect the
purchase in a
don’t cost much products features
relatively short
and benefits
time period
10. Sampling Methods
Door-to-door
Methods Direct mail
Central location distribution
In-store sampling
Cross-product sampling
Co-op package distribution
With newspaper/magazine
Event sampling
Internet sites
13. Premiums
Premium: an offer of an item of
merchandise or service either free or
at a low cost that is an extra
incentive for customers
Two Types of Premiums
Self-liquidating
Free Premiums: Premiums: require
Only require purchase consumer to pay some
of the product or all of the cost of the
premium
14. Contests and Sweepstakes
Contest: a promotion where consumers compete for
prizes or money on the basis of skills or ability. Winners
are determined by judging entries or ascertaining which
entry comes closes to some predetermined criteria
Sweepstakes/games: a promotion where winners are
determined purely by chance and cannot require a proof
of purchase as a condition for entry. Winners are chosen
by random selection from a pool of entries or generation
of a number to match those held by game entrants.
15. Other Popular Consumer Sales Promotion Tools
Bonus Packs
Refunds and
Other Price-off Deals
Rebates
Promotional
Tools
Frequency/
Event
Loyalty
Marketing
Programs
16. Trade-Oriented Sales Promotion Objectives
Maintain trade
Obtain distribution of
support for existing
new products
products
Objectives
Encourage retailers
Build retail
inventories to display
existing brands
17. Types of Trade-Oriented Promotions
Contests and
Incentives
Buying
Trade Allowances
Allowances
Point-of-Purchase Promotional
Displays Allowances
Sales Training
Programs Slotting
Allowances
Trade Shows
Cooperative
Advertising
Relation to text This slide relates to material on pp. 495-496 and Figure 16-1 of the text. Summary Overview Sales promotion can be broken into two major categories, consumer-oriented promotion and trade-oriented promotion. This slide shows the various types of activities of each. Consumer-oriented Samples Coupons Premiums Contests/sweepstakes Refunds/rebates Bonus packs Price-off deals Frequency programs Event marketing Trade-oriented Contests, dealer incentives Trade allowances Point-of-purchase displays Training programs Trade shows Cooperative advertising Use of this slide This slide can be used to show the various tools that can be used for consumer and trade-oriented promotions. Consumer-oriented promotions are generally used as part of a push channel strategy while trade-oriented promotions are part of a pull strategy.
Relation to text This slide relates to material on p. 503 of the text. Summary Overview This slide summarizes the various nonfranchise-building techniques available to marketers and the shortcomings of using non-FB promotions. These include: Price-off deals Bonus packs Rebates/refunds The shortcomings of non-FB promotions are: 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 Use of this slide This slide can be used to discuss the concept of nonfranchise-building promotions, show some examples of them, and review the shortcomings of using these techniques. Short-term non-FB promotions have their place in a firm’s promotional mix, particularly when competitive developments call for them. But their limitations must be recognized when a long-term, brand building strategy for a brand is needed.
Relation to text This slide relates to material on pp. 507-509 of the text. Summary Overview Sampling involves giving the consumer some quantity of the product at no charge to induce trial. This slide outlines three criteria for an effective sampling program. These include: The products are relatively low unit value, so samples do not cost much The products are divisible and can be broken into small sizes that can reflect the products features and benefits The purchase cycle is relatively short so the consumer can purchase in relatively short time period Use of this slide This slide can be used to discuss sampling as a sales promotion technique. Manufacturers of packaged-goods products such as food, health care items, cosmetics, and toiletries, are heavy users of sampling since 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.
.
Relation to text This slide relates to the material on pp. 512-515, 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 as they are usually delivered through inserts in the Sunday paper in most areas. Use of this slide This slide can be used to show an example of a FSI coupon and to engage students in a discussion of coupon distribution methods. Nearly 87% of all coupons are distributed through FSIs. However, this all creates a problem because of the high level of clutter. Most consumers ignore the FSI inserts or do not take the time to go through them thoroughly. However, consumers who are prone to using coupons will go through the FSIs carefully and clip coupons of brands that they use or might be interested in trying.
Relation to text This slide relates to material on pp. 516-517 of the text, which discusses premiums. Summary Overview This slide defines premiums which are an offer of an item of 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 – small gifts or merchandise included in the product package Self-liquidating premiums – require customer to pay for some or all of the cost of the premium Use of this slide This slide can be used to introduce premiums as a sales promotion tool. Packaged carried premiums have high impulse value and can provide an extra incentive to buy the product. Free premiums have become very popular in the fast food restaurant industry as companies such as McDonalds and Burger King use premiums in their kids meals to attract children. Self-liquidating premiums are designed to not necessarily make money, but rather to cover costs and offer value to the consumer.
Relation to text This slide relates to material on pp. 521-524 of the text. Summary Overview This slide shows other types of popular consumer sales promotion tools. Some of these tools include: Refunds and rebates – manufacturer returns a portion of the purchase price usually after a proof of purchase Bonus packs – extra amount of product at the regular price by providing a larger container Price off deals – price reduction offered on the package Frequency/loyalty programs – companies offer the consumer an accumulation of points for the continuation of their purchases Event marketing – promotion where a company is linked to an event or when a themed activity is developed for the purpose of creating experiences for consumers and promoting a product or service Use of this slide This slide can be used to discuss the numerous other consumer sales promotion tools available to marketers. Many of these are growing in popularity particularly frequency/loyalty programs and event marketing. Frequency/loyalty programs are popular as marketers view this tool as a way to retain customers by encouraging them to use their products on a continual basis. Event marketing has become popular as marketers develop IMC programs that create experiences for consumers in an effort to associate their brands with certain lifestyles and activities.
Relation to text This slide relates to material on pp. 525-527 of the text that discusses trade promotion. Summary Overview Trade-oriented sales promotion is targeted to marketing intermediaries such as wholesalers and retailers. There are several reasons promotions are targeted to the trade, which include: Obtain distribution of new product Maintain trade support for existing products Encourage retailers to display existing brands Build retail inventories Use of this slide This slide can be used to introduce trade-oriented sales promotion. Like consumer oriented sales promotion, sales promotion programs targeted to the trade should be based on well-defined objectives and measurable goals and a consideration of what the marketer wants to accomplish .
Relation to text This slide relates to material on pp. 527-533 of the text. Summary Overview Manufacturers use a variety of trade promotion tools as inducements for wholesalers and retailers. These promotions include: Contests and incentives – can be directed toward managers and/or employees at the wholesale or retail level Trade allowances – discount or deal to stock, promote or display manufacturer’s product Buying allowances – price reduction during a fixed period Promotional allowances – discounts for promotional activities Slotting allowances – retailers charge fees for a slot or position on shelf Point-of-purchase displays – various in-store displays used to sell products Sales training programs – assisting in sales training programs for reseller personnel Trade shows – forum where manufacturers can display products Cooperative advertising – cost of advertising is shared by more than one intermediary Use of this slide This slide can be used to discuss the various types of trade promotions. Many of these are often used to encourage the various marketing intermediaries to assist the manufacturer in the sale of product.