This document provides an overview of sales promotion. It defines sales promotion as a direct inducement that offers extra value or incentive to consumers, sales forces or distributors with the primary goal of creating an immediate sale. The document then outlines different vehicles for consumer-oriented promotions like samples, coupons, premiums and contests, as well as trade-oriented promotions like co-op advertising and trade shows. It discusses the objectives and types of both consumer and trade promotions. The document also notes challenges with sales promotion and how promotions can be coordinated with other marketing communication tools.
2. Sales Promotion
“A direct inducement that offers an extra
“A direct inducement that offers an extra
value or incentive for the product to the sales
value or incentive for the product to the sales
force, distributors, or the ultimate consumer
force, distributors, or the ultimate consumer
with the primary objective of creating an
with the primary objective of creating an
immediate sale.”
immediate sale.”
An extra
An extra
incentive to buy
incentive to buy
A tool to
A tool to
speed up sales
speed up sales
Targeted to
Targeted to
different parties
different parties
8. Sales Promotion Increases
Growing power of retailers
Growing power of retailers
Reasons
Reasons
Declining brand loyalty
Declining brand loyalty
Increased promotional sensitivity
Increased promotional sensitivity
Brand proliferation
Brand proliferation
Fragmentation of consumer markets
Fragmentation of consumer markets
Short-term focus of marketers
Short-term focus of marketers
Increased accountability
Increased accountability
Competition
Competition
Clutter
Clutter
9. Consumer Franchise-Building Promotions
Promotional Objectives
Promotional Objectives
Communicate
Communicate
distinctive brand
distinctive brand
attributes
attributes
Develop and
Develop and
reinforce brand
reinforce brand
identity
identity
Build long-term
Build long-term
brand preference
brand preference
Techniques and Practices
Techniques and Practices
“Frequency”
“Frequency”
programs
programs
encourage
encourage
repeat purchase
repeat purchase
Sweepstakes &
Sweepstakes &
contests to build
contests to build
equity, increase
equity, increase
involvement
involvement
Premium offers
Premium offers
that reinforce the
that reinforce the
brand image and
brand image and
help build equity
help build equity
10. Nonfranchise-Building Promotions
Objectives
Objectives
Accelerate the
Accelerate the
purchase decision
purchase decision
process
process
Generate an
Generate an
immediate sales
immediate sales
increase
increase
Limitations
Limitations
Do not identify
Do not identify
unique brand
unique brand
features
features
Do not contribute
Do not contribute
to brand identity or
to brand identity or
image
image
12. Nonfranchise-Building Promotions
May Include .. .. ..
May Include
Price-off deals
Price-off deals
Bonus packs
Bonus packs
Rebates or
Rebates or
refunds
refunds
Shortcomings
Shortcomings
Trade
Trade
promotions
promotions
benefits may not
benefits may not
reach customers
reach customers
If they do, they
If they do, they
may lead only to
may lead only to
price reductions
price reductions
Customers may
Customers may
“buy price”
“buy price”
rather than
rather than
brand equity
brand equity
13. Objectives of Consumer-Oriented Promotions
To increase
To increase
consumption of
consumption of
an established
an established
brand
brand
To obtain trial
To obtain trial
and purchase
and purchase
Objectives
Objectives
Enhance IMC
Enhance IMC
efforts and build
efforts and build
brand equity
brand equity
To defend
To defend
(maintain)
(maintain)
current
current
customers
customers
To target a
To target a
specific segment
specific segment
14. Sampling
Sampling Works Best When
Sampling Works Best When
The products
The products
are of relatively
are of relatively
low unit value
low unit value
The product can
The product can
be broken into a
be broken into a
small piece or size
small piece or size
that reflects the
that reflects the
full features and
full features and
benefits
benefits
The purchase
The purchase
cycle is
cycle is
relatively short
relatively short
18. Couponing
The
oldest and
most widely used
sales promotion tool
Nearly
240 billion
distributed each
year in the US
85% of
consumers
use coupons;
21% use them
regularly
19. Pros and Cons of Coupons
Advantages
Disadvantages
Appeals to price sensitive
Appeals to price sensitive
consumer
consumer
Hard to tell how many
Hard to tell how many
consumers use them and
consumers use them and
when
when
Can offer price break
Can offer price break
without retailers co-op
without retailers co-op
Often used by loyal
Often used by loyal
consumers who may
consumers who may
purchase anyway
purchase anyway
Effective way to induce
Effective way to induce
trial of products
trial of products
Declining redemption rates
Declining redemption rates
and high costs of
and high costs of
couponing
couponing
Can be way to defend
Can be way to defend
market share and
market share and
encourage repurchase
encourage repurchase
Misredemption and fraud
Misredemption and fraud
20. Coupons are Most Often Used With…
Disposable
Disposable
Diapers
Diapers
Cereal
Cereal
Laundry
Laundry
Soap
Soap
27. Premiums
An offer of an item, merchandise, or
An offer of an item, merchandise, or
service, free or at a low cost, that is
service, free or at a low cost, that is
an extra incentive for customers
an extra incentive for customers
Types of Premiums
Types of Premiums
Free:
Free:
Only requires purchase
Only requires purchase
of the product
of the product
Self-liquidating:
Self-liquidating:
consumer required to
consumer required to
pay some or all of the
pay some or all of the
cost of the premium
cost of the premium
29. More Consumer-Oriented Promotions
Contests and
Contests and
sweepstakes
sweepstakes
Refunds and
Refunds and
rebates
rebates
Bonus packs
Bonus packs
Loyalty programs
Loyalty programs
Price-off Deals
Price-off Deals
Event marketing
Event marketing
30. Trade Oriented Promotions
Objectives
Objectives
Obtain distribution for new
Obtain distribution for new
products
products
Maintain support for
Maintain support for
established brands
established brands
Encourage display of
Encourage display of
products
products
Build retail inventories
Build retail inventories
31. Types of Trade Oriented Promotions
Contests and incentives
Contests and incentives
Types
Types
Co-op Advertising
Co-op Advertising
Trade allowances
Trade allowances
POP displays
POP displays
Sales training
Sales training
Trade shows
Trade shows
Buying
Buying
Promotional
Promotional
Slotting
Slotting
Relation to text
This slide relates to material on pp. 509-510 of the text and provides a definition of sales promotion.
Summary Overview
Sales promotion is an inducement or incentive to the sales force, distributors, or ultimate customer with the primary objective of creating immediate sales. There are three important aspects of sales promotion:
An extra incentive to buy, such as coupons, rebates, premium provide extra reason to buy
Acceleration tools to speed up sales and shorten the purchase cycle
Targeting different consumers or businesses
Use of this slide
This slide can be used to introduce sales promotion and its role in the overall IMC program. Attention should be given to these three important aspects of sales promotion.
Relation to text
This slide relates to material on p. 510 and Figure 16-1 of the text.
Summary Overview
Sales promotion can be broken into two major categories, consumer-oriented and trade-oriented. This slide shows the types of activities related to each.
Consumer-oriented promotion
Samples
Coupons
Premiums
Contests/sweepstakes
Refunds/rebates
Bonus packs
Price-off deals
Frequency programs
Event marketing
Trade-oriented promotion
Contests and dealer incentives
Trade allowances
Point-of-purchase displays
Training programs
Trade shows
Cooperative advertising
Consumer-oriented promotions are generally used as part of a push channel strategy while trade-oriented promotions are part of a pull strategy.
Use of this slide
Use this slide to show the types of promotion vehicles that are used for consumer and trade-oriented promotions.
Relation to text
This slide relates to the material on p. 510 of the text.
Summary Overview
This slide contains a commercial shown the use of a promotional offer by the San Diego Padres major league baseball team. The commercial was used to advertise a promotion featuring a give away of a bobble head doll of Dave Winfield who became the first Padre player to enter the Baseball Hall of Fame.
The bobble head doll is really a premium offer and is one of many different promotional offers and special events used by the Padres during the season to provide fans with an extra incentive to attend games. These promotions are an effective way of increasing attendance at Padre games and their impact can be measured by comparing attendance at games with promotion offers to games that do not have them.
Use of this slide
This slide can be used to show how professional sports teams such as the Padres use special promotions to motivate fans to attend games.
Relation to text
This slide relates to material on pp. 510-511 of the text.
Summary Overview
This slide shows the allocation of media advertising, trade promotion, and consumer promotion over time, among consumer packaged goods companies. The graph shows that the percentage of a typical marketers’ budget that is allocated to consumer and trade promotion has increased, while allocations to media advertising have declined. Media advertising used to dominate the budget, but now marketers spend 60-75% of their budgets on sales promotion.
Use of this slide
This slide can be used to discuss the growth of sales promotion and the changes in the allocation of the promotional budget. The reasons for this growth are discussed in the next slide.
Relation to text
This slide relates to the material on pp. 510-511 and Exhibit 16-2.
Summary Overview
This slide shows a print ad for the Chevy Avalanche truck that promotes the “Outdoor Adventure Sweepstakes.” A significant amount of the monies that marketers allocate to media advertising is spent on ads that deliver messages promoting contests, games, sweepstakes, rebates and other promotional offers.
Surveys have shown that marketers devote about 17 percent of their ad budgets to deliver promotional messages.
Use of this slide
This slide can be used to demonstrate how marketers use often use media advertising to deliver a sales promotion message. You might also note how the “Outdoor Adventure Sweepstakes” is an example of a franchise-building promotion that contributes to the image of the Avalanche as a rugged vehicle for the outdoors.
Relation to text
This slide relates to material on pp. 511-516 of the text.
Summary Overview
This slide summarizes the reasons for the growth in sales promotion. These are:
Growing power of retailers. Manufacturers used to have most of the power, now retailers through technology, consolidation, and private labeling have more.
Declining brand loyalty. Consumers are purchasing more on the basis of price and value.
Increased promotional sensitivity. Consumers want to save money and respond well to promotions that provide them the opportunity to do so.
Brand proliferation. Many new brands offer little differentiation.
Fragmentation of consumer markets. Traditional mass media advertising has become less effective and promotions are a way to reach market segments.
Short-term focus. Sales promotion is seen as a way of generating an immediate increase in sales.
Increased accountability. Managers are under pressure to produce sales results.
Competition. Promotions are seen as way to gain a competitive advantage.
Clutter. Promotional offers can break through the clutter and attract attention.
Another reason for the increase in spending is that the promotion industry has become more sophisticated and plays a more strategic role in the IMC program of many companies.
Use of this slide
This slide can be used to discuss the reasons for the increase in the use of sales promotion and the associated shift away from mass media advertising.
Relation to text
This slide relates to material on pp. 517-518 of the text.
Summary Overview
Consumer franchise-building (CFB) promotions are sales promotion activities that:
Communicate distinctive brand attributes
Contribute to the development and reinforcement of brand identity
Build long-term brand preferences
Some of the CFB techniques and practices include:
Frequency programs that encourage repeat purchases
Contests and sweepstakes and increase involvement with the brand and help build equity
Premium offers that are consistent with the brand image help reinforce and/or build equity
For years franchise or image building was viewed as the exclusive realm of advertising, and sales promotion was used only to generate short-term sales increases. But now marketers are recognizing the image-building potential of sales promotion and paying attention to its consumer franchise-building value.
Use of this slide
This slide can be used to introduce consumer franchise building promotions.
Relation to text
This slide relates to material on p. 517-518 of the text.
Summary Overview
Nonfranchise-building promotions are designed to:
Accelerate the purchase decision process and
Generate an immediate increase in sales.
These activities generally do not communicate information about a brand’s unique features or the benefits of using it, so they do not contribute to the building of brand identity and image.
Price-off deals, bonus packs, and rebates are examples of non-FB sales promotion techniques. Trade promotions are criticized for being nonfranchise-building because many of the promotional discounts given to the trade are never passed on to the consumer.
Use of this slide
This slide can be used to introduce nonfranchise-building promotions.
Relation to text
This slide relates to the material on p. 522 and Exhibit 16-9 of the text.
Summary Overview
Marketers are recognizing the value of contests to create interest and excitement in their brands, and to get consumers to become more involved with them. When the Georgia-Pacific Corporation acquired the Brawny paper towel brand a few years ago, the company used a contest to help rebuild the struggling brand.
The goals of the contest were to build brand equity by leveraging the Brawny man icon, as well as to gain insight into the modern woman’s opinions as to what makes a man “brawny.”
The company’s promotional agency developed the “Do you know a Brawny Man?” contest, asking women to send in a photo and a 150-word description explaining why their guy is as rugged as the product.
Use of this slide
This slide can be used to show an example of how sales promotion tools, like this contest, help build brand equity.
Relation to text
This slide relates to material on p. 518 of the text.
Summary Overview
This slide summarizes the various nonfranchise-building techniques available to marketers and the shortcomings of using them. The techniques include:
Price-off deals
Bonus packs
Rebates/refunds
The shortcomings of non-FB promotions include:
Trade promotion benefits may not reach customers
If they do, they may lead only to price reductions
Customers may “buy price” rather than brand equity
Short-term non-FB promotions have their place in a firm’s promotional mix, particularly when competitive situations call for them. But their limitations must be recognized when a long-term, brand building strategy for a brand is needed.
Use of this slide
This slide can be used to discuss the concept of nonfranchise-building promotions, list some examples, and review the shortcomings of these techniques.
Relation to text
This slide relates to material on pp. 518-522 of the text.
Summary Overview
Objectives of consumer-oriented sales promotions are to:
Obtain trial and purchase
Increase consumption of an established brand
Defend (maintain) current customers
Target a specific segment
Enhance IMC efforts and build brand equity
Although the basic goal of most consumer-oriented sales promotion programs is to encourage purchases, these other objectives for both new and established brands should be considered.
Use of this slide
This slide can be used to discuss the objectives that companies hope to achieve by using them.
Relation to text
This slide relates to material on pp. 522-523 of the text.
Summary Overview
Sampling involves giving the consumer some quantity of the product at no charge to induce trial. There are three criteria for an effective sampling program. First, the products are relatively low unit value, so samples do not cost much. Second, the product can be broken into a small piece or size that reflects the full features and benefits. And third, the purchase cycle is relatively short so the consumer can purchase in relatively short time period.
Manufacturers of packaged-goods products, such as food, health care items, cosmetics, and toiletries, are heavy users of sampling because their products meet the three criteria for an effective sampling program.
As a sales promotion technique, sampling is commonly used to introduce a new product or brand to the market.
Use of this slide
This slide can be used to discuss sampling as a sales promotion technique.
Relation to text
This slide relates to material on pp. 523-524 of the text.
Summary Overview
A basic decision of the brand or sales promotion manager is how the sample will be distributed to consumers. Choices include:
Door-to-door
Direct mail
In-store sampling
On package
At events
With newspapers or magazines
Through Internet sites
The choice of a sampling method has two important considerations, the cost of distribution, and the method that will be used to control who receives the sample.
Use of this slide
This slide can be used to discuss the various ways samples can be distributed to the consumer.
Relation to text
This slide relates to the material on pp. 523-524 and Exhibit 16-10.
Summary Overview
Polybags are used by many newspapers to distribute samples. They provide a method for delivering the sample as well as an attention getting message that will be seen when people pick up their paper.
The San Diego Union Tribune newspaper promotes the use of polybags to distribute samples, and includes this ad in its media kit.
Use of this slide
Use this slide to explain how samples can be delivered directly to a consumer’s residence by distributing them with newspapers.
Relation to text
This slide relates to the material on pp. 523-524 and Exhibit 16-11.
Summary Overview
This slide shows how ArmorAll uses on-package sampling for its automotive care products. Small packages of car cleaner and car wash are attached to the package of ArmorAll protectant, which is the company’s primary product.
This sampling method makes it possible for consumers who purchase ArmorAll protectant to try other products made by the company and hopefully become users of those products as well.
Use of this slide
This slide can be used to show how on-package sampling is used by marketers.
Relation to text
This slide relates to material on p. 524 of the text.
Summary Overview
The most effective sales promotion tool is the cent-off coupon. They are the oldest and most widely used sales promotion tool, and nearly 260 billion are distributed each year in the United States. About 75% of consumers use coupons, and 21% use them regularly.
Use of this slide
This slide can be used to introduce coupons as a sales promotion tool. More detailed discussion of coupons will follow.
Relation to text
This slide relates to material on pp. 525-526 of the text which discusses coupons.
Summary Overview
Coupons are the most popular sales promotion tool for both new and established products, and they have many advantages, including:
Their appeal to price-sensitive consumers
Being able to offer a price break without involving the retailers co-op
Inducing trial of new or existing products
Defense of market share and encourage repurchase
Disadvantages of coupons include:
The difficulty of determining how many consumers will use coupons and when
They are often used by loyal consumers who may purchase anyway
Declining redemption rates
High costs
Misredemption and fraud
Use of this slide
This slide can be used to discuss the advantages and disadvantages of coupons.
Relation to text
This slide relates to material on p. 525 of the text.
Summary Overview
Coupons are most often used to promote disposable diapers, followed by cereal, detergent, and deodorant. Product categories where coupons are used the least are carbonated beverages, candy, and gum.
Use of this slide
This slide can be used to discuss the use and redemption of coupons in various product categories.
Relation to text
This slide relates to material on p. 526 of the text.
Summary Overview
This slide shows the various ways coupons are disseminated to consumers. Distribution through newspaper freestanding inserts (FSIs) is by far the most popular method, accounting for 87% of all coupons distributed. This is due to the availability of high quality, four-color graphics, competitive distribution costs, national same-day circulation, market selectivity, and the fact they can be competition free due to category exclusivity.
Use of this slide
This slide can be used to discuss the distribution of coupons to consumers.
Relation to text
This slide relates to the material on pp. 526-528, which discusses coupon distribution methods.
Summary Overview
This slide shows a Free Standing Insert type of coupon used by Chicken of the Sea to promote various seafood products. FSIs are the most popular method for delivering coupons to consumers, and they are usually delivered through inserts in the Sunday paper.
Nearly all coupons are distributed through FSIs. However, this creates a clutter problem. Most consumers ignore the FSI inserts or do not take the time to go through them thoroughly. However, consumers who use coupons will go through the FSIs carefully and clip coupons of brands that they use or might be interested in trying.
Use of this slide
Use this slide to show an example of an FSI coupon and to engage students in a discussion of coupon distribution methods.
Relation to text
This slide relates to material on pp. 526-527 and Figure 16-3 of the text.
Summary Overview
This slide shows the coupon redemption rates of health, beauty, and grocery products by media type. The highest coupon redemption rates are instant on-package coupons, electronically dispensed handouts, and on-shelf coupons. Although freestanding inserts are the most poplar method of distributing coupons, the redemption rate is relatively low.
The coupons with the highest rates of redemption are those available at the point of purchase. The low redemption rate of freestanding insert coupons may be a result of clutter in the Sunday newspaper and the effort required to cut them out and save them for a shopping trip.
Use of this slide
This slide can be used to discuss the redemptions rates of coupons given the various media they are distributed through.
Relation to text
This slide relates to the material on p. 526 and Exhibit 16-33.
Summary Overview
Valpak Direct Marketing Systems promotes the Valpak blue envelope, which distributes coupons and other promotional offers to consumers in more than 50 million homes. This ad promotes the value of the coupons inside.
Use of this slide
This slide can be used to discuss how coupons are distributed though direct mail companies such as Valpak Direct Marketing Systems. It can also be as part of a discussion of how Valpak uses advertising to enhance consumers perceptions of the value of the offers that arrive in the blue envelope.
Relation to textThis slide relates to pp. 528-529 of the text.
Summary OverviewPlacing coupons either inside or on the outside of the package is a distribution method that accounts for just over 1 percent of the coupons distributed.
Bounce-back coupons are redeemable for the next purchase, and are an incentive to repurchase the brand.
Cross-ruff coupons are redeemable on the purchase of a different product, usually by the same company
Instant coupons are attached to the package so it can be redeemed at the time of purchase
In-store coupons come in many forms and can be found in various locations:
Tear-off pads
Handouts
On-shelf and electronic dispensers
Register printouts, based on products being scanned for purchase.
Use of this slideUse this slide to discuss the types of coupons that are commonly found in stores.
Relation to textThis slide relates to page 530 and Exhibit 16-16.
Summary OverviewSome marketers and retailers now use the Internet as a medium for distributing coupons, and several companies now offer online couponing services, including Valpak. Consumers can log onto the Web site, enter their Zip code, choose from a list of participating grocery stores in their area, and then download coupons.
Another way to distribute coupons is via mobile couponing, where coupons are sent directly to mobile phones. Cellfire, show on this slide, distributes coupons to the mobile devices of consumers who sign up for its service. TGI Friday, Subway, Papa John’s, and several music and video stores are already working with Cellfire.
Use of this slideUse this slide when discussing the electronic methods by which coupons are available today.
Relation to text
This slide relates to material on pp. 530-532 of the text, which discusses premiums.
Summary Overview
This slide defines a premium as an offer of an item, merchandise, or service, either free or at a low cost, that is an extra incentive for customers. There are two basic types of premiums:
Free premiums are small gifts or merchandise that is included in the product package.
Self-liquidating premiums require the customer to pay for some or all of the cost of the premium.
Package carried premiums have high impulse value and provide an extra incentive to buy the product. Free premiums are popular in the fast food restaurant industry, and companies like McDonalds and Burger King use premiums in their kids meals to attract children. Self-liquidating premiums are designed, not necessarily to make money, but to cover costs and offer value to the consumer.
Use of this slide
This slide can be used to introduce premiums as a sales promotion tool.
Relation to text
This slide relates to the material on pp. 531-532 and Exhibit 16-17 of the text.
Summary Overview
This slide shows a trade ad from American Airline’s AAdvantage Marketing Programs. It is targeted toward marketers, encouraging them to use AAdvantage miles as a promotional incentive. American Airlines launched its AAdvantage frequent flier program in 1981 and it has become the largest loyalty program of any kind, with over 45 million members. This program, along with others that United offers, have made airline miles a promotional currency. Airlines make more than $2 billion each year selling miles to other marketers, who use them as a promotional incentive for hotels, rental cars, phone service, and a variety of other products and services.
Use of this slide
This slide can be used to discuss the use of airline miles as a premium incentive.
Relation to textThis slide relates to pp. 532-539 of the text.
Summary OverviewContests and sweepstakes are an increasingly popular consumer-oriented promotion because they generate excitement among consumers who have a “pot of gold” mentality.
Refunds, also known as rebates, are offers by the manufacturer to return a portion of the product purchase price, usually after the consumer supplies some proof of purchase. Consumers are generally receptive to rebate offers, particularly as the size of the savings increases. Rebates enhance the likelihood of repeat purchase of the brand.
Bonus packs offer the consumer an extra amount of a product at the regular price by providing larger containers or extra units.
Price-off deals simply reduce the price of the product, with the reduction typically printed right on the packaging.
Loyalty programs are one of the fastest-growing areas of sales promotion. They offer consumers the ability to accumulate points for purchasing their products or services. The points can then be traded for some sort of reward.
Event marketing is a type of promotion where a company or brand is linked to an event or where a themed activity is developed fro the purpose of creating experiences for consumers and promoting a product or service.
Use of this slideUse this slide to present additional types of consumer-oriented promotions.
Relation to textThis slide relates to pages 540-542.
Summary OverviewLike consumer-oriented promotions, sales promotion programs target to the trade should be based on well-defined objectives and measurable goals. Typical objectives include:
Obtaining distribution and support for new products
Maintaining support for established brands
Encouraging retailers to display established brands
Building retail inventories
Use of this slideUse this slide to discuss the objectives of trade-oriented sales promotions.
Relation to textThis slide relates to pages 542-548 of the text.
Summary OverviewManufacturers use a variety of trade promotion tools as inducements for wholesalers and retailers. These promotions include contests and incentives, trade allowances, displays and point-of-purchase materials, sales training programs, trade shows and co-op advertising.
Use of this slideUse this slide to point out the types of incentives that manufacturers use to get wholesalers and retailers to treat them, and their products, favorably.
Relation to textThis slide relates to pages 549-550 of the text.
Summary OverviewSales promotion techniques work best in conjunction with advertising and other integrated marketing tools. When properly planned and executed to work together, advertising and sales promotion can have a synergistic effect much greater than that of either promotional mix alone.
Proper coordination of sales promotion with other IMC tools is essential if the firm is to take advantage of the opportunities offered by each, and get the most out of its promotional budget.
Use of this slideUse this slide when explaining the importance of coordinating all your sales, advertising, and IMC tools.
Relation to textThis slide relates to
Summary OverviewConsumer and trade promotions can be an effective tool for generating short-term increases in sales. This is an easier route to profitability than is building the brand’s image over time. However, sales promotions are becoming so over used that they can be detrimental to a brand. For example:
A brand that is over-promoted may lose perceived value.
According to attribution theory, consumers who consistently purchase a brand because of a coupon of price-off deal may attribute their behavior to the promotional incentive, rather than to a favorable attitude toward the brand.
If a promotion is successful, competitors may copy it. Once everyone is using the sales promotion, profit margins fall, and it is hard for any one firm to hop off the promotional bandwagon. This is a sales promotion trap.
In many parts of the country, supermarkets have gotten into the trap of doubling or even tripling cents-off coupons. Fast-food chains have fallen into the trap of the “dollar menu.”
Use of this slideUse this slide to explain some of the drawbacks of using sales promotions. Also point out that marketers must be careful not to damage the brand franchise with sales promotions, or get the firm in a promotional war that erodes profit margins and threatens the company’s long-term existance.
Relation to textThis slide relates to page 552 of the text.
Summary OverviewThere are three aspects to consumer promotions; economic, informative, and affective. In addition to economic effects, marketers must consider the information and signals a promotional offer conveys to the consumer, as well as the affective influences. These include the consumer feelings and emotions aroused by exposure to a promotion or associated with purchasing the brand or the company that is offering a deal.
Use of this slideUse this slide to explain that, by consider all of these effects, managers can design and communicate consumer promotions more efficiently and effectively.