Visit Florida IMC Topic I Sales Promotions

1. Visit Florida IMC Topic ISales Promotions Peter HayashidaLynn Maikke Marketing 642 Fall 2003

2. Outline • Background • Core Issues • Findings Recommendations • Critical Factors for Success • Impact on Competition, Market and VF

3. Background • What is Sales Promotion? • Tools that stimulate increased frequency or quantity of purchase of a product or service among end-users and intermediates (the trade) • Generally focused on short-term results • Advertising presents the case, sales promotions provide immediate incentive to buy • Can be used for: • Acquisition: e.g., free samples • Retention/increased usage: e.g., frequent flyer programs

4. Prevalence • Sales promotions have become increasingly important within the marketing mix • 10 years ago, 60:40 mix of advertising to sales promotions • Today, 65 – 70% of budget is promotions • Why? • More accepted as an effective sales tool • More product managers skilled in their use • Greater pressure to increase current sales.

5. Types of Promotions • Categorized by target audience: • Consumer promotions (free samples, coupons, discounts, prizes, loyalty programs, tie-ins, and point-of-purchase displays) • Trade promotions emphasize advertising, discounts, and display allowances • Business and sales force promotions involve trade shows and conventions, specialty advertising, and contests for sales associates

6. Types of Promotions • Categorized by type: • Added-value promotions • Give the consumer something in addition to the product • Price Promotions • Discounts, coupons, etc. • PROHIBITED IN VISIT FLORIDA

7. VISIT FLORIDA Promotions Department • In-house • Works with local and international partners: media, retail outlets, and others • Assembles tour packages that offer advertising exposure to partners • Caveat: need to coordinate promotional message and themes with advertising

8. Findings • In the absence of price promotions, must focus on added-value promotions • Because of strength of ability to assemble packages, sweepstakes, prizes and giveaways have the most potential

9. Research • Researchers Ward and Hill (1991) proposed factors that maximize return • Differentiate games of chance from games of skill • Differentiate games with immediate payoffs from those with delayed gratification • Findings support games of chance (e.g., sweepstakes) where the payoff occurs at some point in the future • Especially appropriate with a “big ticket” item like a vacation package

10. More Research • Consumers decide to participate based on both intrinsic and extrinsic factors • Perception of odds of winning and value of the prize(s) are critical to their decision • More research later…

11. Recommendations • VISIT FLORIDA should implement a sweepstakes program • Prize is seven-day vacation package to one of several destinations in Florida (includes airfare and car rental) • Winners selected at random • Time cycle should be long – full duration of the VISIT FLORIDA campaign

12. Recommendations • Individuals enter each time they visit the state for a weekend or longer • Focus on leisure, not business traveler • Participants initially complete a mail-in entry form with survey questionnaire • Entrants will rank several FLA destinations • Prizes allocated more closely to winners’ preferences • Provides data regarding most popular destinations.

13. Recommendations • Each time participants visit for a at least a weekend, they will receive an additional chance to win • Allowing multiple entries from actual visitors matches rewards with desired behavior • Favors most relevant population: frequent visitors

14. Critical Success Factors • Design and implementation are key • Extra care to not lead participants re: • Value of prizes • Odds of winning • Be as clear as possible • Emphasize the randomness of winner selection • Extra caution for multiple prize packages • Indirect relationship between time horizon and consumer disappointment • All players receive a nominal token of value redeemable in Florida

15. Alternative Game Format • Different types of games attract different types of consumers • Scratch off game • Game piece is also a coupon • Allows for a high level of control with a limited number of tickets and a single winner • Emphasize the randomness with a “Better Luck Next Time” message

16. Implications for Competitors, Markets, and VF • Generic nature of sun-destinations • The number of brands has increased • Consumers more price-oriented • Advertising efficiency has declined • Rising costs, media clutter, and legal restraints • Differentiate VF as a destination of diversity • Emphasize art, culture, and other outdoor activities • Sales promotions should supplement advertising with a consistent message and themes

17. Maximizing Results • General objectives of sales promotion • Attract new users • Reward loyal customers (retention) • Increase the repurchase rate of occasional users • Attract brand switchers • Most effective when the product is superior • VISIT FLORIDA sales promotion objectives • Induce consumers to visit the state for the 1st time • Promote greater consumer awareness • Adapt programs to different consumer segments • Converting brand switchers to loyal users depends on the consumers overall “experience”

18. Questions & Discussion