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Promotional Mix. Sales Promotion: Represents all marketing activities used to promote sales outside of personal selling, advertising, and PR. Increase sales Acquire customers Create a positive business or corporate image. Sales Promotions v. Advertising.
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Promotional Mix • Sales Promotion:Represents all marketing activities used to promote sales outside of personal selling, advertising, and PR. • Increase sales • Acquire customers • Create a positive business or corporate image
Sales Promotions v. Advertising • Advertising positions a product or service so that it looks better to a consumer compared to its competition • Sales Promotions include a variety of strategies designed to offer purchasers an extra incentive to buy. • Why use sales promotions? • To increase sales in a short time. • To introduce a new product on the market
Sales Promotions • Sales promotions are Incentives that encourage customers to buy products or services • Broken down into Trade Promotions & Consumer Promotions • Trade promotions are sales promotion activities designed to get support for a product from a manufacturer, wholesaler, & retailer. • Trade promotions focus on businesses selling to other businesses • A lot of money is spent on promoting your product to other businesses versus the actually consumer
Trade Promotions • Types of Trade Promotions that exist include: • Promotional Allowances • Cooperative Advertising • Slotting Allowances • Sales Force Promotions • Trade Shows & Conventions • Dealer Loaders
Trade Promotions: Promotional Allowance • Promotional Allowance: Funds given by a manufacturer to a middleman or retailer for promoting its product. • For example, a household products company gives a grocery chain a promotional allowance for placing their new detergent in a special display at the end of the aisle.
Trade Promotions • Dealer Loaders-Giftoffered to a retailer by a manufacturer as a bonus for purchasing the manufacturer's merchandise. • Usually something the retailer gets to keep after promotion ends
Cooperative Advertising: A manufacturer supports the retailer by helping to pay for the cost of advertising a product locally. • Example Walgreens receives money from companies like Pepsi in order for their circular to be placed in the local newspapers like the Charlotte Observer
Trade Promotions: Slotting Allowances • Slotting Allowance: A one-time payment by a manufacturer or vendor to a retailer in order to ensure shelf space in the retailer's store(s) or in its warehouses. • Endcap sales 500% greater • Front Counter Sales 1000% greater
Sales Promotions Sales Force Allowance: Awards given to dealers and employees who successfully meet or exceed a sales quota. Awards range from cash prizes, to merchandise, or travel awards.
Sales Promotions Trade Shows & Conventions: Allow companies to showcase a particular line of product. • Introduce new products • Encourage increased sales of existing products • Gain support • Many companies invest millions of dollars in their display booths.
Sales Promotions: Consumer promotions • Consumer Promotions: Sales strategies that encourage customers and prospects to buy a product or service. • Support advertising, personal selling, & PR efforts. • Include promotional tactics such as distributing coupons, premiums, product samples, loyalty programs, & product placement.
Sales Promotions: Consumer • Coupons: Certificates that entitle customers to cash discounts on goods and services. • Stores that accept coupons send them to the manufacturers’ headquarters or to a clearinghouse to be sorted and passed along to redemption centers. • The centers in turn reimburse the stores for the face value of each coupon plus a handling charge of about $.08. • The redemption center then bills the manufacturer for the amount they pay.
Consumer Promotions Rebates-like coupons, offer value to purchasers typically by lowering product price. Rebates often request the purchaser to submit personal data in order to obtain rebate.
Consumer Promotions Free Standing Inserts: Advertising brochure, card, or leaflet inserted in a newspaper or magazine, usually to serve as a reply coupon or discount voucher.
Consumer Promotion Promotional Pricing: A reduction on the selling price of a product
Consumer sales promotions Trade-In allow consumers to obtain lower prices by exchanging something the customer possess, such as an older product that the new purchase will replace.
Consumer Promotions • Demonstrations-promotional technique whereby the use of a product is demonstrated in a retail outlet. • The in-store demonstration is used most often in large department stores, supermarkets, or mass-merchandise outlets that exhibits a heavy consumer-traffic pattern. • Often, manufacturers will offer product discounts to dealers who will do in-store demonstrations.
Consumer Promotions • Premiums: Low cost items given to consumers at a discount or for free. • Designed to increase sales by building product loyalty, & attracting new customers. • Should create an immediate need for the customer to buy • The 3 most common types of consumer premiums are factory packs, traffic builders, & coupon plans.
Consumer sales Promotions A traffic builder is a low cost premium that a company gives away to customers for attending an event Coupon Plans are ongoing programs that offer a variety of premiums in exchange for labels or coupons. Factory packs are free gifts placed in product packages.
Consumer Sales Promotions Sponsorships: Companies pay a fee for the right to promote itself & its products or services at or on a set location. The locations can be a physical site (stadium), an event (concert), a group (car racing team), or a person (golfer).
Consumer Sales Promotions Loyalty Marketing Programs Frequent Buyer Program Reward customers for patronizing company Airlines: Frequent Flyer Programs T.G.I. Fridays: Gold Points Card Hotel: Stay 2 Nights, Get 3rd Free
Consumer Sales Promotion Product Placement A consumer promotion that involves using a brand-name product in a movie, television show, sporting event, or music video.
Consumer Sales Promotions • Incentive • High priced items earned through giveaways, sweepstakes, & contests • Prizes are usually cash prizes, cars, or vacations • Contests: Consumers usually have to do something to win • Sweepstakes: Game of chance to win
Consumer sales Promotions Product Sample: Free sample of the product Can be sent through the mail or given in person
Consumer Promotions • Personal Appearance: • Someone of interest to the target marketis paid to make an appearance supporting a product • Author • Sports figure • Celebrity • Generates foot traffic to store or mall
Consumer Sales Promotions Point-of-Purchase Displays Displays designed primarily by manufacturers to hold and display their products Promote impulse purchases
Assignment • Create five types of sales or consumer promotions for any product or service you wish • All promotions must be original • No copy & paste • You can draw out your designs or use a computer • Examples: • Create a coupon for a product that interests you • Draw a FactoryPack • Create a flyer of a concert or event that is being sponsored • Do a video or take a picture where product placement is being used
