Patricia Knowles, Ph.D.
This is the definition of sales promotion:
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A direct inducement that offers an extra value or
incentive for the product to the sales force, distributors,
or ultimate consumer with the primary objective
of creating an immediate sale.
Corn Flakes Premium Offer
This visual highlights a premium offered by Kellogg’s.
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Sales Promotion Vehicles
These are the types of promotion vehicles that are used for consumer- and trade-oriented
Pages 521 / Figure 16 - 1
Sales training programs
Media Often Delivers a Promotion Message
This visual shows a print ad for Channel Lock that promotes the “Football Challenge
Page 510 – 511 / Exhibit 16 - 2
Reasons for Sales Promotion Increases
This is a summary of the reasons for growth in sales promotion.
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Declining brand loyalty
Increased promotional sensitivity
Fragmented consumer markets
Short-term focus of marketers
Growing power of retailers
Sales Promotion Concerns
These are some of the perceived negative impacts of sales promotions.
• Negative impact of sales promotions
– Fewer dollars to build brand equity
– Encourages consumers to purchase on the basis of price
– Detracts from the value of the brand
This chart introduces nonfranchise building promotions.
Accelerate the purchase
Generate an immediate sales
Do not identify unique brand
Do not contribute to brand
identity or image
Objectives of Consumer-Oriented Promotions
These are the objectives companies hope to achieve by using consumer-oriented sales
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Increase consumption of an
Enhance IMC efforts and build
Defend (maintain) current
Targeting Specific Consumers
This visual highlights a contest targeted to Hispanic consumers.
Page 533 / Exhibit 16 - 9
These are the conditions under which sampling works best.
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The products are of
relatively low unit
The product can be
broken into a small piece
or size that reflects the
full features and benefits
The purchase cycle is
Sampling Works Best When
“Free Friday” Promotion
This visual contains an ad from Jack in the Box’s “Free Friday” promotion.
Page 534 / Exhibit 16 - 10
These are the various ways in which samples may be distributed.
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These are the three criteria for an effective sampling program.
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Products are of
relatively low unit value,
so samples don’t cost
Products are divisible and
can be broken into small
sizes that reflect the
products features and
Purchase cycle is
relatively short so the
consumer can soon
Sampling Works Best When
Samples are Often Distributed with Newspapers
This is an example of a collateral piece from the media kit of the San Diego Union Tribune
newspaper promoting the use of polybags to distribute samples.
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This visual shows how Armour All uses on-package sampling for its automotive care
Armour All Uses On-Package Samples
Page 531 / Exhibit 16 - 11
This slide introduces coupons as a sales promotion tool.
year in the US
most widely used
sales promotion tool
21% use them
Pros and Cons of Coupons
This chart presents the advantages and disadvantages of coupons.
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Appeals to price sensitive consumers
Can offer discounts without retailer
Effective way to induce trial of
Defends market share and
Often used by loyal consumers who
would purchase anyway
Hard to tell how many consumers
will use them and when
Low redemption rates and high costs
Most Often Used Coupons
These are the product categories where coupons are used most.
Coupon Misredemption and Fraud
These are some of the ways in which coupon misredemption or fraud occurs:
• Customer redemption for a product or size not specified on the coupon
• Salesclerk redemption of coupons for cash
• Store managers gathering and redeeming coupons without the accompanying sale
• Criminals gather or print coupons and sell them to unethical merchants
• Web-source fraud, whereby coupons are produced and distributed online
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These are the various ways in which coupons are disseminated to consumers:
• In order of usage
• Freestanding inserts (86%)
• In-store couponing (6%)
• Direct mail (2%)
• Magazines (2%)
• Newspapers (1%)
• Coupons inside/outside product (1%)
• Other methods (2%)
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FSIs are the Most Popular Coupon Type
This visual shows a Free Standing Insert type of coupon used by Chicken of the Sea to
promote various seafood products.
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Coupon Redemption Rates
This chart shows the coupon redemption rates of health, beauty, and grocery products by
Pages 538 – 542 / Figure 16 - 3
Valpak Enhances Value of Coupons
This ad promotes the value of the coupons inside.
Pages 538 – 539 / Exhibit 16 - 13
Types of Coupons
These are the types of coupons that are available for in/on-pack and in-store use.
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This visual shows an instant cross-ruff coupon that applies to the purchase of any Real
California Cheese and Tia Rosa Tortillas.
Page 540 / Exhibit 16 - 15
Coupons are Available Electronically
This is an ad by Cellfire, which distributes coupons to mobile phones.
Page 530 / Exhibit 16 - 16
This chart defines premiums and differentiates between free and self-liquidating premiums.
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An offer of an item, merchandise, or service, free or at a low
cost, that is an extra incentive for customers
Types of Premiums
Only requires purchase of the
Consumer required to pay some or
all of the cost of the premium
Airline Miles are a Popular Incentive
This visual shows a trade ad from American Airline’s AAdvantage Marketing Programs.
Pages 542 - 544 / Exhibit 16 - 18
More Consumer-Oriented Promotions
These are additional types of consumer-oriented promotions.
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Contests and sweepstakes
Refunds and rebates
Infomercials and Home-Shopping
Contests and sweepstakes are an increasingly popular consumer-oriented promotion. There
are differences between contests and sweepstakes as stated.
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Promotion where winners are determined purely by chance
Winners chosen by random selection from pool of
entries or generation of a number to match those
held by game entrants
Consumers compete for prizes or money on the basis of skills
Winners determined by judging entries or ascertaining which
entry is closest to predetermined criteria
Cannot require proof of purchase as a condition for entry
Trade Oriented Promotions
These are the objectives of trade-oriented promotions.
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Maintain support for established brands
Encourage display of products
Build retail inventories
Obtain distribution for new products
Types of Trade Oriented Promotions
This chart shows the types of incentives that manufacturers use to get wholesalers and
retailers to treat them, and their products, favorably.
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Contests and incentives
This is the definition of trade-oriented cooperative advertising and its three forms:
• Trade-oriented cooperative advertising
• The cost of advertising is shared by more than one party
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Types of Cooperative Advertising
These are the various types of cooperative advertising.
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Promotion Agencies’ Shifting Role
This is how the role of sales promotion agencies is changing.
Page 564 / Figure 16 - 6
Agency team contact
One full-service firm
Equal to ad agency
Do single project
Hired for specialty
Single agency contact
Inferior to ad agency
Traditional New and Improved
Coordinating Sales, Advertising, and IMC Tools
This visual introduces the coordination of sales promotions with other IMC tools.
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Media support and
Sales Promotion Abuse
These are the reasons behind the over-use of sales promotions and the negative impact that
results from it:
Over-use of sales promotions
• Looking for quick sales fixes
• Easier to drop prices than to differentiate your product
• A brand that is constantly promoted may lose perceived value
• Purchases based on discounts, not a favorable attitude
• Sales promotion trap or spiral
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The Sales Promotion Trap
This chart illustrates the sales promotion trap dilemma.
Page 565 / Figure 16 - 7