1. 1-1

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. 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. 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. 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. The Significance of Sales Promotion
The Significance of Sales Promotion
Sales Promotion
Expenditures
Consumer Factors
Impact of Technology
Increased Retail Power
1-6

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. 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. 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. 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. 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. 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. 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. 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. 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. Global Concerns
Global Concerns
• The Global
Perspective requires
marketers to make an
extra effort to become
familiar with local laws
and customs.
1-16