Sales Promotion    Dr. George BelchSan Diego State University
Sales Promotion“A direct inducement that offers an extravalue or incentive for the product to the salesforce, distributors...
Sales Promotion VehiclesConsumer-Oriented          Trade-Oriented       Samples          Contests, dealer incentives      ...
Reasons for Increase in Sales Promotion             Growing power of retailersReasons      Declining brand loyalty        ...
Consumer Franchise-Building (CFB) Promotions                     CFB Promotional                       Objectives Communic...
Nonfranchise-Building (non-FB) Promotions              Non-FB Promotional                  Objectives Accelerate the      ...
Nonfranchise-Building (non-FB) Promotions             Non-FB Promotions May                  Include . . .                ...
Objectives of Consumer-Oriented   Sales Promotion                          To increase                          To increas...
Sampling               Sampling Works Best                      When                                         The purchase ...
Sampling Methods            Door-to-doorMethods     Direct mail            Central location distribution            In-sto...
Coupons        The                                                              Nearly     oldest and                     ...
FSIs are the Most Popular Types of Coupons
Premiums       Premium: an offer of an item of       merchandise or service either free or       at a low cost that is an ...
Contests and SweepstakesContest: a promotion where consumers compete forprizes or money on the basis of skills or ability....
Other Popular Consumer Sales Promotion Tools                    Bonus PacksRefunds and                   Other            ...
Trade-Oriented Sales Promotion Objectives                                        Maintain tradeObtain distribution of     ...
Types of Trade-Oriented Promotions   Contests and    Incentives                           Buying Trade Allowances         ...
Types of Cooperative Advertising  Horizontal                    Ingredient- Cooperative                    Sponsored  Adve...
Promotion Agencies’ Shifting Role     Traditional              New and Improved   Created tactics              Creates str...
The Sales Promotion Trap                      1    2                      3    4
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Lecture 10-sales promotion

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Lecture 10-sales promotion

  1. 1. Sales Promotion Dr. George BelchSan Diego State University
  2. 2. Sales Promotion“A direct inducement that offers an extravalue or incentive for the product to the salesforce, distributors, or the ultimate consumerwith the primary objective of creating animmediate sale.” An extra A tool toincentive to buy speed up sales Targeted to different parties
  3. 3. Sales Promotion VehiclesConsumer-Oriented Trade-Oriented Samples Contests, dealer incentives Coupons Trade allowances Premiums Point-of-purchase displays Contests/sweepstakes Training programs Refunds/rebates Trade shows Bonus packs Packs Cooperative advertising Price-off deals Frequency programs Loyalty programs Event marketing
  4. 4. Reasons for Increase in Sales Promotion Growing power of retailersReasons Declining brand loyalty Increased promotional sensitivity Brand proliferation Fragmentation of consumer markets Short-term focus of marketers Increased accountability Competition Clutter
  5. 5. Consumer Franchise-Building (CFB) Promotions CFB Promotional Objectives Communicate Develop and Build long-termdistinctive brand reinforce brand brand preference attributes identity CFB Techniques and Practices “Frequency” Contests and, “Frequency” “Frequency” Premium offers programs that sweepstakes that programs programs that reinforce theencourage repeat increaseencourage repeat encourage brand image and purchase and involvement and purchase patronage loyalty help build equity loyalty help build equity ©
  6. 6. Nonfranchise-Building (non-FB) Promotions Non-FB Promotional Objectives Accelerate the Generate anpurchase decision immediate sales process increase Non-FB Promotions . . . Do not identify Do not contribute to unique brand brand identity or features image
  7. 7. Nonfranchise-Building (non-FB) Promotions Non-FB Promotions May Include . . . Rebates orPrice-off deals Bonus packs refunds Non-FB Promotions ShortcomingsTrade promotions If they do, they Customers maybenefits may not may lead only to “buy price” ratherreach customers price reductions than brand equity
  8. 8. Objectives of Consumer-Oriented Sales Promotion To increase To increase consumption of consumption of an established an established brand brand To defendTo obtain trial (maintain)and purchase current Objectives customers Enhance IMC To target a efforts and build specific segment brand equity
  9. 9. Sampling Sampling Works Best When The purchase The products are cycle is The products divisible and can relatively shortare of relatively be broken into so the low unit value, small sizes that consumer can so samples can reflect the purchase in adon’t cost much products features relatively short and benefits time period
  10. 10. Sampling Methods Door-to-doorMethods Direct mail Central location distribution In-store sampling Cross-product sampling Co-op package distribution With newspaper/magazine Event sampling Internet sites
  11. 11. Coupons The Nearly oldest and 260 billion 240 most widely used distributed eachsales promotion tool year in the US Coupons 80 percent of consumers use coupons and 25% use them regularly © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  12. 12. FSIs are the Most Popular Types of Coupons
  13. 13. Premiums Premium: an offer of an item of merchandise or service either free or at a low cost that is an extra incentive for customers Two Types of Premiums Self-liquidatingFree Premiums: Premiums: requireOnly require purchase consumer to pay someof the product or all of the cost of the premium
  14. 14. Contests and SweepstakesContest: a promotion where consumers compete forprizes or money on the basis of skills or ability. Winnersare determined by judging entries or ascertaining whichentry comes closes to some predetermined criteriaSweepstakes/games: a promotion where winners aredetermined purely by chance and cannot require a proofof purchase as a condition for entry. Winners are chosenby random selection from a pool of entries or generationof a number to match those held by game entrants.
  15. 15. Other Popular Consumer Sales Promotion Tools Bonus PacksRefunds and Other Price-off Deals Rebates Promotional Tools Frequency/ Event Loyalty Marketing Programs
  16. 16. Trade-Oriented Sales Promotion Objectives Maintain tradeObtain distribution of support for existing new products products Objectives Encourage retailers Build retail inventories to display existing brands
  17. 17. Types of Trade-Oriented Promotions Contests and Incentives Buying Trade Allowances Allowances Point-of-Purchase Promotional Displays Allowances Sales Training Programs Slotting Allowances Trade Shows Cooperative Advertising
  18. 18. Types of Cooperative Advertising Horizontal Ingredient- Cooperative Sponsored Advertising Coop Advertising Cooperative Advertising Vertical Cooperative Advertising ©
  19. 19. Promotion Agencies’ Shifting Role Traditional New and Improved Created tactics Creates strategy Do single project Continuing service Hired for specialty One full-service firmSingle agency contact Agency team contactInferior to ad agency Equal to ad agencyIndirect accountability Directly accountable ©
  20. 20. The Sales Promotion Trap 1 2 3 4

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