Sales Promotion and Public Relations


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Sales Promotion and Public Relations

  1. 1. Chapter 15 & 16 Sales Promotion and Public Relations
  2. 2. Chapter 15 & 16 Objectives 1. Define and state the objectives of sales promotion. 2. Discuss the most common forms of consumer sales promotion. 3. List the most common forms of trade sales promotion. 4. Discuss the role of public relations in the promotional mix.
  3. 3. Sales Promotion  Provides Incentive <ul><li>Sales promotion consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. </li></ul>
  4. 4. Increasing Importance of Sales Promotion <ul><ul><li>Number of brands has increased </li></ul></ul><ul><ul><li>Competitors use promotions frequently </li></ul></ul><ul><ul><li>Many brands are seen as similar </li></ul></ul><ul><ul><li>Consumers are more price-oriented </li></ul></ul><ul><ul><li>The trade has demanded more deals from manufacturers </li></ul></ul><ul><ul><li>Advertising efficiency has declined </li></ul></ul>Increasing Promotion Clutter
  5. 5. Sales Promotion Sales Promotion Targets Consumer Sales Promotion Trade Sales Promotion
  6. 6. Sales Promotion Immediate Purchases Increase Trial Boost consumer inventory Encourage repurchase Increase ad effectiveness Encourage brand switching Objectives of Sales Promotion Encourage brand loyalty
  7. 7. Popular Tools for Consumer Sales Promotion Tools for Consumer Sales Promotion Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion
  8. 8. Consumers & Sales Promotion Goals Type of Buyer Desired Results Sales Promotion Examples Loyal Customers <ul><li>Reinforce behavior </li></ul><ul><li>Increase consumption </li></ul><ul><li>Loyalty marketing </li></ul><ul><li>Bonus packs </li></ul>Competitor’s Customers <ul><li>Break loyalty </li></ul><ul><li>Persuade to switch </li></ul><ul><li>Sampling </li></ul><ul><li>Sweepstakes, contests, premiums </li></ul>Brand Switchers <ul><li>Persuade to buy your brand more often </li></ul><ul><li>Price-lowering promotion </li></ul>Price Buyers <ul><li>Appeal with low prices </li></ul><ul><li>Supply added value </li></ul><ul><li>Coupons, price-off packages </li></ul>
  9. 9. Unique Tools for Trade Sales Promotion Tools for Trade Sales Promotion Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows
  10. 10. Consumer vs. Trade promotions Manufacturer promotes to wholesaler Wholesaler promotes to retailer Retailer promotes to consumer Consumer buys from retailer Trade promotions use a push strategy Orders to manufacturer Manufacturer promotes to consumer Consumer demands product from retailer Retailer demands product from wholesaler Wholesaler demands product from manufacturer Orders to manufacturer Consumer promotion uses pull strategy
  11. 11. Why use trade promotion tools? <ul><li>To persuade the retailer or wholesaler to carry the brand </li></ul><ul><ul><ul><li>Prices off, allowances, free goods or slotting allowances </li></ul></ul></ul><ul><li>To persuade the retailer or wholesaler to carry more units than the normal amount </li></ul><ul><ul><ul><li>Volume allowances: trade will work harder when they are “loaded” with manufacturer’s product </li></ul></ul></ul><ul><li>Induce retailers to promote the brand </li></ul><ul><ul><ul><li>Featuring, display and price reductions </li></ul></ul></ul><ul><li>Stimulate retailers to push the product </li></ul><ul><ul><ul><li>Push money, sales aids, sales contests </li></ul></ul></ul><ul><ul><ul><li>Insist on “proof of performance” </li></ul></ul></ul>
  12. 12. Price vs. Added-Value Promotions <ul><li>Types of sales promotion may enhance brand image: </li></ul><ul><ul><ul><li>Pine-Sol ran a “Pine-Sol in Pine Valley” sweepstakes </li></ul></ul></ul><ul><ul><ul><ul><li>Association of ordinary cleaning agent with stars </li></ul></ul></ul></ul><ul><ul><ul><li>Toro Snow Insurance: $50 to each Sept. buyer if it didn’t snow before January. </li></ul></ul></ul><ul><ul><ul><li>H ä agen-Dazs ran cents-off sales promotion “Sweet Charity” where price savings would be contributed to support public TV </li></ul></ul></ul>
  13. 13. Public Relations A public is any group that has an actual or potential interest in or impact on a company’s ability to achieve its objectives Public Relations (PR) involves a variety of programs designed to promote or protect a company’s image or its individual products.
  14. 14. Functions of Public Relations Press Relations Product Publicity Corporate Communication Public Affairs Lobbying Employee and Investor Relations Crisis Management
  15. 15. Major Public Relations Tools Tools Used By PR Professionals Product Placement Event Sponsorship Issue Sponsorship Internet Web Sites Consumer Education New Product Publicity
  16. 16. PR Examples <ul><li>Intel and the Pentium Chip – 1994 </li></ul><ul><ul><li>Refused to replace chip unless consumers could prove they used their computers for complex math operations </li></ul></ul><ul><ul><li>PR rescue reputation </li></ul></ul><ul><ul><ul><li>Pentium-replacement service centers </li></ul></ul></ul><ul><ul><ul><li>Placed employees inside retail stores </li></ul></ul></ul><ul><ul><ul><li>Tried to reach customers one-on-one </li></ul></ul></ul><ul><li>Microsoft and Windows 95 </li></ul><ul><ul><li>No paid ads for Windows 95 had appeared by launch day </li></ul></ul><ul><ul><li>Around 3,000 headlines, 6,852 stories about Windows 95 from July 1 to August 24 (launch day) </li></ul></ul><ul><ul><li>Empire State Building (red, yellow and green colors) </li></ul></ul><ul><ul><li>The London Times was distributed free its entire daily run of 1.5 million copies. </li></ul></ul>