Sales promotion, advertising and distribution channels


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Sales promotion, advertising and distribution channels

  1. 1. Sales Promotion, Adervertisingand Distribution Channel
  2. 2. What is Sales Promotion? Various techniques to enhance brand value  Integrated activity: Ad/PR/Marketing Increasing brand value for:  Consumers  Consumer sales promotion  Retailers  Trade-market sales promotion
  3. 3. Major Sales Promotion Tools Coupons Price-off deals Premiums Contests/sweepstakes Samples/trial offers Product placement Refunds Rebates Frequency programs
  4. 4. Major Sales Promotion Tools Point-of-purchase displays Incentives Allowances Trade shows Cooperative advertising
  5. 5. Coupons Advantages:  Some consumer respond to price incentives  Coupon users are likely brand switchers  Manufacturer controls timing of drop  Repeat—coupon chain build brand loyalty  Induce users to try upscale model Disadvantages:  Current users use coupons, reducing profits  High cost of administering coupon program  Fraudulent use of coupons  False redemption by consumers and retailers
  6. 6. Price-off & Premiums 10-25% price reduction incentive  Comes out of manufacturer’s pocket  Regular users often stock up on product Products offered free as premium  Products inserted inside other products  Free Printer with laptop purchase  Products exchanged for proof of purchase  Might be an additional amount of same product
  7. 7. Contests and Sweepstakes Contest: consumers compete based on skill Sweepstakes: winner selected by chance  Scratch-off cards, McD’s Monopoly game Problems:  High cost of administration/prizes  Regulations and restrictions  Consumer focus on the game over the product
  8. 8. Sampling and Trial Offers Useful for new products Existing products with weak market shares in specific geographic areas Types of Sampling:  In-store sampling  Door-to-door — newspaper insertion  Mail sampling — targeted zip codes  On-package sampling — shampoo to conditioner  Mobile sampling — Weinermobile  Trial offers — free for a limited time
  9. 9. Product Placement Products inserted into movies and TV  Started with Reese’s Pieces in ET Firms specialize in product placements  Reality TV, Sitcoms, Film, Sports
  10. 10. Frequency Programs Frequent flyer programs Loyal customer rewards  To induce brand loyalty  To increase sales volume Similar to rebates  Money returned after purchase  Can induce multiple purchases
  11. 11. Objectives for Consumer SalesPromotion  Stimulating trial purchase  E.g., Free trial product / Coupons  Stimulating repeat purchases  E.g., Frequent flyer / Hotel rewards programs  Stimulating larger purchases  E.g., Two-for-one price reduction  Introducing a new brand  E.g., Trials inserted into newspapers  Combating competitor’s strategy  Discount response to competitor’s product launch
  12. 12. P.O.P. Displays and Incentives Drawing attention to product on shelf  May also include:  coupons and sweepstakes forms  Increases sales for retailers Awards of travel certificates, gifts, cash bonuses for reaching sales targets  Motivating the sales force at P.O.P.
  13. 13. Allowances Merchandise allowances  Free product  Can reward retailer for featuring display  Slotting fees: direct cash to stock item
  14. 14. Trade Shows Related products from different manufacturers  Impressing retailers and consumers with the latest product developments  Tech - Consumer Electronics Show  Automobiles - NAIAS - Detroit
  15. 15. Sales-training Programs Manufacturer provides training  Helps retail sales force  Complex products like computers Demonstrational videos and brochures
  17. 17. AdvertisingAdvertising is any paid form of nonpersonal presentation and promotion of ideas,goods,or services by an identified sponsor.
  18. 18. The 5 Ms of Advertising
  19. 19. Advertising objective A specific communication task to be accomplished with a specific target audience during a specific period of time.
  20. 20. Advertising Objectives Informative advertising Persuasive advertising Reminder advertising
  21. 21. Advertising strategy1.Creating the advertising message Message strategy Message execution2.Selecting advertising media Deciding on reach ,Frequency, and Impact Choosing among major media types Selecting specific media vehicles decide on media timing
  23. 23. Distribution Channels A set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption.
  24. 24. Nature and Importance of DistributionChannels Distribution channels is the circulatory system of a hospitality company. Competition, a global marketplace, electronic distribution techniques have increased the importance of distribution. In the global economic market, companies should create innovative ways to approach to new and existing markets
  25. 25. Distribution Channel Functions Information: gathering and distributing marketing research and intelligence information about the marketing environment. Promotion: developing and spreading persuasive communications about an offer Contact: finding and communicating with prospective buyers Matching: shaping and fitting the offer to the buyer’s needs, including such activities as manufacturing, grading, assembling, and packaging.
  26. 26. Number of Channel LevelsChannel Level - Each Layer of Marketing Intermediaries that Perform Some Work in Bringing the Product and its Ownership Closer to the Final Buyer. 0-level channel Producer Consumer 1-level channel Producer Retailer → Consumer 2-level channelProducer → Wholesaler Retailer → Consumer 3-level channelProducer → Wholesaler → Jobber → Retailer → Consumer
  27. 27. THANKS