Extra Credit Opportunity

1. Extra Credit Opportunity Bring in coupons, discount flyers, free offers, etc. for extra credit. You can earn 1 point per promotion (must be in good condition). MAXIMUM OF FIVE PROMOTIONS.

2. Quick Question How have you been persuaded to buy merchandise? How have you been informed about new products? Brainstorm the types of promotions that you frequently encounter.

3. Types of Promotion Section 17.2

4. Objectives • define sales promotion • explain the use of promotional tie-ins, trade sales promotions, and loyalty marketing programs

5. Sales Promotion Sales promotions can be used to: • encourage customers to try a new product • build awareness • increase purchases by current customers • reward loyalty

6. Trade Promotions More money is actually spent on promoting to businesses than to consumers.

7. Trade Promotions, Cont. Good business ethics require that trade promotional payments and awards: • be offered in a uniform manner • terms be clearly spelled out • no one be penalized for not achieving the goals

8. Major Trade Promotions Include: • promotional allowances • cooperative advertising • slotting allowances • sales force promotions • trade shows and conventions

9. Promotional Allowances • represent cash payments or discounts given by manufacturers to wholesalers or retailers for performing activities to encourage sales • example: price discount for stocking a large quantity of a product

10. Cooperative Advertising • manufacturer helps the retailer to pay the cost of advertising the product locally

11. Slotting Allowances • cash premium paid by a manufacturer to help the retailer cover the costs of placing the product on the shelves • range from a few thousand to several million dollars per product

12. Slotting Allowances, cont. • pay for space in store, discount specials, charges for store shelves, penalties for poor sales, advertising, display costs

13. Sales Force Promotions • awards given to dealers and employees who successfully meet or exceed a sales quota • can be for a specified period of time • can include cash, bonuses, or prizes

14. Trade Shows and Conventions • showcase a particular line of products • introduce new products • encourage increased sales of existing products • meet customers and partners • gain continued company and product support

15. Consumer Promotions • promotional tie-ins • product placement • loyalty marketing programs • point-of-purchase displays • coupons • premium deals • deals • incentives • product samples • sponsorships

16. Coupons • used to introduce new products, enhance sales of existing products, and encourage retailers to stock and display both • found on packages, in magazines, or downloadable online

17. Coupons, Cont. • stores send coupons to manufacturers or clearinghouses to be reimbursed for the amount of the coupon • clearinghouses charge a handling fee

18. Quick Activity Read the promotion on page 371. What is this rebate offer promoting?

19. Premium Deals • increase sales by building product loyalty and attracting new customers • fundamental concept – people will be more motivated to buy a product when they are offered an added-value gift in exchange

20. Premium Deals, Cont. • factory packs – free gifts placed in product packages • traffic builders – low-cost pens, key chains, calendars, coffee mugs given away at the store or event

21. Premium Deals, Cont. • coupon plans – offer a variety of premiums in exchange for product labels or coupons obtained from the product (send in labels and get a gift)

22. Deals • offer short-term price reductions that are marked directly on the package • example: two products bound together for the price of one

23. Incentives • contests – activities that require the participant to demonstrate a skill • sweepstakes – games of chance • rebates – discounts offered by manufacturers during a given time period

24. Quick Activity Turn to page 372. Which two goals does this premium offer seek to accomplish? What type of plan do you think this ad promotes – factory packs, traffic builders, or coupon plan?

25. Product Samples • can be sent through the mail, distributed door-to-door, or given away at retail stores and trade shows • especially important in promoting new products

26. Sponsorships • company pays a fee for the right to promote itself and its products at or on a set location • physical site: airport • event: concert • group: Nascar team • person: celebrity or athlete

27. Sponsorships • title sponsor – an organization that pays to have its name incorporated into the name of the sponsored location • high-profile promotion

28. Promotional tie-Ins • partners combine their resources to conduct a promotion that will create additional sales for each partner

29. Product Placement • using a brand name product in a movie, TV show, sporting event, etc. • helps an organization develop recognition for its products and increase exposure

30. Loyalty marketing programs • frequent buyer/reward programs • frequent flyer programs, Panera rewards card • offer consumers incentives to continue to buy

31. Loyalty Marketing Programs • online loyalty marketing – Yahoo! awards points to consumers who buy from certain retailers that can be turned into frequent flyer miles

32. Quick Activity On page 373 – read “Net Marketing”. With a partner, suggest how online grocers can promote online shopping and avoid high promotional costs.

33. Quick Activity Turn to page 374. Why are loyalty programs involving co-branded credit cards growing in popularity? Would you change from one brand to another if the other one had co-branded with a company that you like?

34. Point-of-Purchase Displays • designed primarily by manufacturers to hold and display their products • placed in high traffic areas and promote impulse purchases

35. Extra Credit Assignment Choose one of your coupons and create a small poster to explain the parts. Consider: • how you received it • what it entails • restrictions and expiration dates • locations • how the coupon contributes to the sale of the product