Sales Promotion, Point-of-Purchase Advertising, and Support Media

1. Sales Promotion, Point-of-Purchase Advertising, and Support Media 15 1 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

2. Part Five: Integrated Brand Promotion • We have considered the Process, Planning, Creative Development, and Media Placement of advertising and IBP in the first Four Parts of the book • Now we take a detailed look at the full range of IBP tools available to the advertiser • Each of these IBP tools has a unique capability to influence audience perception of a brand 15

3. Sales Promotion — Defined • “Using incentives to create a perception of greater brand value” • Consumer Market Sales Promotion • Induce household consumers to purchase a firm’s brand • Trade-Market Sales Promotion • Motivate distributors, wholesalers, and retailers to stock and feature a brand • Business Market Sales Promotion • Cultivate buyers in large corporations who make purchase decisions 15

4. Sales Promotion Examples Brand Placements Loyalty Programs Contests Premiums Trade Shows Price-off deals Coupons Sampling Point-of-Purchase Displays Gift Cards Allowances Incentives 15 Sweepstakes 4

5. Sales Promotion vs. Advertising • Short-term demand vs. long-term demand • Encourages brand switching vs. brand loyalty • Induces trial use vs. encourage repeat purchase • Promotes price vs. image • Immediate results vs. long-term effects • Measurable results vs. difficult to measure 15

6. Importance and Growth of the Use Sales Promotion • Reasons for growth: • Demand for accountability • Short-term orientation • Consumer response to promotions • Proliferation of brands • Increased power of retailers • Media clutter 15

7. Objectives for Consumer-Market Sales Promotion 1. Stimulate trial purchase 2. Stimulate repeat purchases 3. Stimulate larger purchases 4. Introduce a new brand 5. Combat or disrupt competitors 6. Contribute to IBP effort 15

8. Consumer-Market Sales Promotion Techniques 1. Coupons 2. Price-off deals 3. Premiums 4. Contests/sweeps 5. Samples and trials • Phone gift cards • Rebates • Frequency programs 15

9. Coupons • Entitles a buyer to a price reduction for a product or service • Advantages • Give discount to price sensitive consumerswhile selling brand at full price to others • Induce brand switching • Timing and distribution can be controlled • Stimulates repeat purchases • Gets regular users to trade up within a brand array 15

10. Coupons are the most widely used form of consumer sales promotion. Courtesy of Campbell Soup Company

11. Coupons Disadvantages • Timing of redemption cannot be controlled • No way to prevent current, brand loyal customers from redeeming coupons • Coupon programs require costly administration • Fraud is a serious, chronic problem 15

12. Price-Off Deals • Offers consumer reduced price at point of purchase through specially marked packages • Advantages • Controllable by manufacturer • Can effect positive price comparisons • Consumers believe it increases value of a known brand • Disadvantage • Retailers believe it creates inventory and pricing problems 15

13. Premiums and Advertising Specialties • Premiums: a free or reduced price item with purchase of another item • Free premiums provide item at no cost to consumer • Self-liquidating premiums require consumers to pay most of the cost of the item • Advertising specialties: • A message placed on a free, useful item: pens, ball caps, coffee mugs 15

14. Premiums attract attention to a brand and offer the consumer something for free. Courtesy, Oreck Corporation

15. Contests and Sweepstakes • Contests: consumers compete for prizesbased on skill or ability • Sweepstakes: winners picked by chance • Both create excitement and brand interest • But . . . • Legal and regulatory requirements are complex • Consumers may focus on the game rather than the brand • Difficult to get an IBP brand feature message across in a game 15

16. Samples and Trial Offers • Sampling: Giving consumer an opportunity to use a brand on a trial basis with little or no risk • Types of sampling - In-store (Costco) - Newspaper - Door-to-door - On-package - Mail - Mobile • Trial offers - Used for more expensive items - Consumer tries a brand for a fixed time (week, month) 15

17. Phone and Gift Cards • Manufacturers offer either for free orfor purchase debit cards • Cell phone time • iTune downloads • Preset spending limits • Examples include offers fromStarbucks, Barnes & Noble, and The Gap 15

18. Rebates • Money back offer often requiring the buyer to mail a request for money back from the manufacturer • Can be used for large ticket items as well • Often tied to multiple purchases • Many consumers fail to bother sending in the rebate request form 15

19. Frequency Programs • Also known as “continuity” programs • Offers customers discounts or free products for repeat patronage • Common in airline, hotel, and restaurant businesses 15

20. Objectives for Promotions in the Trade Market • Objectives: Uses a “push” strategy: Push the product into the distribution channel to the consumer • Obtain initial distribution • Increase order size • Encourage cooperation with consumer market sales promotions • Increase store traffic at retail 15

21. Trade-Market Sales PromotionTechniques • Incentives: Push money • Allowances: • merchandise allowances • slotting fees • bill-back allowances • off-invoice allowances • Sales Training Programs • Cooperative (Co-Op) Advertising 15

22. Business Market Sales Promotion Techniques • Trade Shows • Business gifts • Premiums and advertising specialties • Trial offers • Frequency programs 15

23. Trial offers are very effective in the business market. Why? © Vitro Robinson

24. Risks of Sales Promotion • Create a price orientation which contradicts brand image development • Borrow from future sales • Alienate loyal customers • Significant time and expense • Legal considerations 15

25. Point of Purchase (P-O-P)Advertising Definition • Materials used in the retail setting to attract shoppers’ attention to a brand, to convey primary product benefits, or highlight pricing information. • Displays may feature “price-off” deals as well. • Firms starting to use mobile device distribution Objectives for Point-of-Purchase Advertising • Draw consumers’ attention to a brand in the retail setting. • Maintain purchase loyalty among brand loyal users. • Stimulate increased or varied usage of the brand. • Stimulate trial use by users of competitive brands. 15

26. P-O-P and Mobile Location Marketing 15 Some argue that P-O-P is Mobile Location Marketing But, new technologies allow sending P-O-P offers through mobile devices Consumer attitudes toward location marketing are still unknown 26

27. P-O-P Advertising and the Trade and Business Markets • Product displays and information sheets encourage retailers to support one distributor or manufacturer’s brand over another. • P-O-P promotions can help win precious shelf space and exposure in a retail setting. • A P-O-P display should be designed to draw attention to a brand, increase turnover, and possibly distribute coupons or sweepstakes entry forms. • To combat losing business to online shopping, retailers are trying to enliven the retail environment, and point-of-purchase displays are a key strategy. 15

28. Support Media Purpose: To reinforce or extend a message being delivered through other media • Signs, billboards, posters • Transit and Aerial advertising • Cinema advertising • Directory advertising • Packaging 15

29. Outdoor Signage and Billboards Advantages • Wide local exposure • Can be captivating • Around-the-clock exposure • Can address an immediate need or desire • New digital technology being used Disadvantages • Message limits • Location affects impact • Relatively expensive • Criticized by environmental groups 15

30. Transit Ads • Urban environments • Reasonable demographic segmentation • Good message repetition • Timely to purchase locations • Can subtlety build brand awareness 14

31. Transit ads can reach a target audience in well defined geographic areas. © Chris Allen

32. Aerial Ads • Blimps increasingly common • Common at sporting events • Digital technology offers more creativity • Skies are getting crowded! • Networks are in control 15

33. Cinema 15 • On-screen and off-screen in theaters • Consumers say they are annoyed • Research says reasonable acceptance of cinema ads 33

34. Directory Advertising Advantages • High acceptance • High availability • Final link topurchase Disadvantages • Too manydirectories • Long lead times for printed versions • Limited creativity 15

35. Packaging Promotional Benefits of Packagingto the Advertiser: • The package carries the brand name and logo • The package can communicate “value” • The package can communicate “image” and “quality” 15

36. Packaging highlights the brand name, quality and image. © Crayons, Inc.

37. Check Your Understanding What is the difference between advertising specialties and business gifts? • Specialties have the sponsor’s logo on them, while business gifts do not. • Specialties promote brand awareness, while business gifts promote close working relationships. • Specialties are quite expensive, while business gifts are very inexpensive. • Specialties are given on a selective basis, while business gifts are distributed to all. 15

38. Check Your Understanding Shampoo manufacturers sometimes run a promotion in which they shrink-wrap two plastic bottles of shampoo for the price of one. They most often use this buy-one-get-one-free tactic when they want to • stimulate repeat purchases and add to their loyal customer base. • build a better brand image and create emotional bonds with consumers. • introduce a new brand and gain new buyers. • stimulate larger purchases of a product and reduce inventory. 15