1-1
Chapter 18

• Consumer and Trade Sales Promotion
1-2 cGraw-Hill/Irwin
M

Copyright © 2004 by The McGraw-Hill Companies, In...
After studying this chapter
you should be able to:
• Explain the role and significance of sales
promotion in the marketing...
After studying this chapter
you should be able to:
• Discuss the objectives and techniques
of trade sales promotion.
• Exp...
The Role of Sales Promotion
• Sales Promotion:
– Consists of media and non-media marketing
communications employed for a p...
The Significance of Sales Promotion
The Significance of Sales Promotion
Sales Promotion
Expenditures
Consumer Factors
Impa...
The 10 Commandments of Creative
The 10 Commandments of Creative
Sales Promotion
Sales Promotion
1.
2.
3.
4.
5.
6.
7.
8.

S...
Consumer Sales Promotion
Consumer Sales Promotion
Objectives of Consumer Sales
Promotion:
•
Stimulate trial
•
Increase con...
Consumer Sales Promotion
Consumer Sales Promotion
Techniques
Techniques
••
••
••
••
••
••
••
••

1-9

Price Deals
Price De...
Trade Sales Promotion
Trade Sales Promotion
Objectives of Trade Sales Promotion:
•
•
•
•
•
•

1-10

Gain/maintain distribu...
Trade Sales Promotion Techniques
Trade Sales Promotion Techniques
•
•
•
•
•
•
•

1-11

Trade Allowances
Dealer Loaders
Tra...
Limitations of Sales Promotion
Limitations of Sales Promotion
• It typically cannot reverse a genuine declining
sales tren...
Limitations of Sales Promotion
Limitations of Sales Promotion
• Short-term volume gain at the sacrifice of
profits.
– Forw...
Ethical and Legal Issues
Ethical and Legal Issues
in Sales Promotion
in Sales Promotion
• Deceptive Sales Promotion
• Frau...
Ethical and Legal Issues
Ethical and Legal Issues
in Sales Promotion
in Sales Promotion
Diverting (or Arbitraging):
• Secr...
Global Concerns
Global Concerns

• The Global
Perspective requires
marketers to make an
extra effort to become
familiar wi...
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  1. 1. 1-1
  2. 2. Chapter 18 • Consumer and Trade Sales Promotion 1-2 cGraw-Hill/Irwin M Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
  3. 3. After studying this chapter you should be able to: • Explain the role and significance of sales promotion in the marketing communications mix. • Understand why sales promotion expenditures account for a significant portion of many firms’ marketing communications budgets. 1-3 • Discuss the objectives and techniques of consumer sales promotion.
  4. 4. After studying this chapter you should be able to: • Discuss the objectives and techniques of trade sales promotion. • Explain the limitations of sales promotion. • Realize how deceptive and fraudulent sales promotion victimizes both consumers and marketers. 1-4
  5. 5. The Role of Sales Promotion • Sales Promotion: – Consists of media and non-media marketing communications employed for a predetermined, limited time to stimulate trial, increase consumer demand, or improve product availability. • Consumer Sales Promotion: – Directed at Consumers • Trade Sales Promotion: – Directed at Resellers 1-5
  6. 6. The Significance of Sales Promotion The Significance of Sales Promotion Sales Promotion Expenditures Consumer Factors Impact of Technology Increased Retail Power 1-6
  7. 7. The 10 Commandments of Creative The 10 Commandments of Creative Sales Promotion Sales Promotion 1. 2. 3. 4. 5. 6. 7. 8. Set specific objectives Know how basic promotion techniques work Use simple, attention-getting copy Use contemporary, easy-to-track graphics Clearly communicate the concept Reinforce the brand’s advertising message. Support the brand’s positioning and image. Coordinate promotional efforts with other marketing plans. 9. Know the media you work with. 10. Involve the trade. 1-7
  8. 8. Consumer Sales Promotion Consumer Sales Promotion Objectives of Consumer Sales Promotion: • Stimulate trial • Increase consumer inventory and consumption • Encourage repurchase • Neutralize competitors • Increase sales of complementary products • Stimulate impulse purchasing • Allow flexible pricing 1-8
  9. 9. Consumer Sales Promotion Consumer Sales Promotion Techniques Techniques •• •• •• •• •• •• •• •• 1-9 Price Deals Price Deals Coupons Coupons Rebates Rebates Cross-Promotions Cross-Promotions Contests, Sweepstakes, Contests, Sweepstakes, Games Games Premiums Premiums Sampling Sampling Advertising Specialties Advertising Specialties
  10. 10. Trade Sales Promotion Trade Sales Promotion Objectives of Trade Sales Promotion: • • • • • • 1-10 Gain/maintain distribution Influence resellers to promote product Influence resellers to offer price discount Increase reseller inventory Defend against competitors Avoid reduction of normal prices
  11. 11. Trade Sales Promotion Techniques Trade Sales Promotion Techniques • • • • • • • 1-11 Trade Allowances Dealer Loaders Trade Contests Point-of-Purchase Displays Trade Shows Training Programs Push Money
  12. 12. Limitations of Sales Promotion Limitations of Sales Promotion • It typically cannot reverse a genuine declining sales trend. • Marketers cannot reasonable expect sales promotion to convert refection of an inferior product into acceptance. • Sales promotion may even weaken the brand image. • Sales promotion has also been blamed for encouraging competitive retaliation. 1-12
  13. 13. Limitations of Sales Promotion Limitations of Sales Promotion • Short-term volume gain at the sacrifice of profits. – Forward Buying: • People buy more than they need at the deal price. – Pay-for-Performance Trade Promotions: • Retailers are rewarded for making sales to consumers rather than making purchases from manufacturers. 1-13
  14. 14. Ethical and Legal Issues Ethical and Legal Issues in Sales Promotion in Sales Promotion • Deceptive Sales Promotion • Fraud: • • • • 1-14 The Fake Storefront Stuffing the Ballot Box Playing the Middleman The Redemption Scam
  15. 15. Ethical and Legal Issues Ethical and Legal Issues in Sales Promotion in Sales Promotion Diverting (or Arbitraging): • Secretly purchasing a product where it is less expensive, usually as a result of a trade promotion, and reselling in areas where prices are higher. 1-15
  16. 16. Global Concerns Global Concerns • The Global Perspective requires marketers to make an extra effort to become familiar with local laws and customs. 1-16

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