Sales Promotion

1. Sales Promotion 15-1

2. Boony Doll a ‘boonanza’ for sales promotion 15-2

3. An extraincentive to buy A tool to speed up sales Targeted to different parties Sales promotion A direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating an immediate sale. 15-3

4. Sales promotion vehicles Consumer-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 Price-off deals Cooperative advertising Loyalty programs Event marketing 15-4

5. Growing power of retailers Declining brand loyalty Increased promotional sensitivity Brand proliferation Fragmentation of consumer markets Short-term focus of marketers Increased accountability Clutter Explanations for increase in sales promotion Some reasons 15-5

6. The shifting role of the sales promotion agency 15-6

7. Consumer-oriented sales promotion Identify target audiences Determine sales promotion objectives Obtain trial and repurchase Increase consumption Target a specific market segment Defend current customers Enhance IMC and build brand equity Set measurable goals 15-7

8. Myer gift with purchase 15-8

9. Types of consumer promotions used by packaged goods manufacturers 15-9

10. The products are of relatively low unit value, so samples do not cost much The products are divisible and can be broken into small sizes that can reflect the product’s features and benefits The purchase cycle is relatively short so the consumer can purchase in a relatively short time period Sampling Sampling works best when 15-10

11. Bertoli’s ‘Taste of Tuscany’ 15-11

12. Door-to-door Direct mail In-store sampling On-package sampling Event sampling With magazine/newspaper Other Sampling distribution Methods 15-12

13. Bundle of baby products 15-13

14. The oldest and most widely used sales promotion tool Used by virtually all packaged goods manufacturers Coupons Coupons 15-14

15. Advantages and limitations of coupons Disadvantages Advantages Difficult to determine how many consumers will use coupons and when Appeal to price-sensitive consumer Can offer price break without retailer’s cooperation Coupons are often used by loyal consumers who may purchase anyway Can be effective way to induce trial of new or existing products Declining redemption rates and high costs of couponing Can be way to defend market share and encourage repurchase Misredemption and fraud 15-15

16. Other Magazines In/on pack Direct mail Newspaper coop. Shop-a-docket Freestanding inserts Coupon distribution 15-16

17. Shop-a-docket: an Australian innovation 15-17

18. Two types of premiums Free premiums: Only require purchase of the product Self-liquidating premiums: require consumer to pay some or all of the cost of the premium 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 15-18

19. McDonald’s Happy Meals 15-19

20. Contests and sweepstakes Contest: a promotion where consumers compete for prizes or money on the basis of skills or ability. Winners are determined by judging entries or ascertaining which entry comes closest to some predetermined criteria. Sweepstakes/games: a promotion where winners are determined purely by chance and cannot require a proof of purchase as a condition for entry. Winners are chosen by random selection from a pool of entries or generation of a number to match those held by game entrants. 15-20

21. Do not contribute to brand building Focus not on brand Effectiveness Negative publicity Federal regulations Use by professionals or hobbyists Problems with contests and sweepstakes Problems Effectiveness Legal considerations May generate negative publicity 15-21

22. Bonus packs Refunds and rebates Price-off deals Event marketing Frequency/loyalty programs Other popular consumer sales promotion tools Otherpromotional tools 15-22

23. A bonus for consumers 15-23

24. Loyalty programs 15-24

25. Summary of consumer-oriented promotions and market objectives 15-25

26. Obtain distribution of new products Maintain trade support for existing products Build retail inventories Encourage retailers to display existing brands Trade-oriented sales promotion objectives Objectives 15-26

27. Buying Allowances Promotional Allowances Slotting Allowances Types of trade-oriented promotions Contests and incentives Buying allowances Trade allowances Point-of-purchase displays Promotional allowances Sales training programs Slotting allowances Trade shows Cooperative advertising 15-27

28. Horizontal cooperative advertising Ingredient-sponsored coop advertising Verticalcooperativeadvertising Types of cooperative advertising Cooperativeadvertising 15-28

29. The sales promotion trap 2 1 4 3 15-29

30. Summary and conclusions • Over the past two decades, marketers have been allocating increased share of promotional budget to sales promotion. • Sales promotion techniques can be: • consumer oriented • trade oriented. • Sales promotion techniques include sampling, coupons, premiums, competitions, rebates and refunds. • Sales promotion abuse can occur when marketers become overly dependent on sales promotions techniques at the expense of building long-term brand position, brand equity and customer relationships. 15-30