Types of Promotions

1. Types of Promotions Do Now: Review Promotions activity Hand in test corrections

2. Activity #1: You own a small boutique that sells merchandise of your choice. Your sales have been going up, but you want more foot traffic to ultimately increase awareness and profits. You want to introduce a new line of products to your store, but you are afraid that: 1) You can’t afford to advertise your new product, 2) You’re not sure you can afford to appropriately stock the store with the merchandise. What do you do?

3. Sales Promotions • Promotions are broken down into two categories: • Trade promotion • Consumer Promotion

4. Trade Promotions • Trade promotions – are sales promotion activities designed to get support for a product from manufacturers, wholesalers, and retailers. • Money is spent on promoting to businesses than to customers.

5. Types of Trade Promotions • Promotional Allowances – represents cash payments or discounts given by manufactures to wholesalers or retailers for performing activities to encourage sales. • Example – A cash payment or price discount given stock a large quantity of a product.

6. Types of Trade Promotions cont’d • Cooperative Advertising – A manufacturer supports the retailer by helping to pay for the cost of advertising a product. • Slotting Allowance – cash paid by a manufacturer to a retailer to help the retailer cover the costs of placing the product on the shelves. (buying space)

7. Types of Trade Promotions cont’d • Sales Force Promotions – awards given to dealers and employees who successfully meet or exceed a sales quota.

8. Types of Trade Promotions cont’d • Trade Shows and Conventions – enable manufactures to showcase a particular line of products. • Provide businesses with opportunities to introduce new products, increase sales of new and existing products, meet customers and partners, and gain company support. • (Electronics Show in Las Vegas= 190,000 businesses. Invest $$$ into display booths)

9. Consumer Promotion • Consumer Promotions - are sales strategies that encourage customers and prospects to buy a product or service.

10. Consumer Promotion cont’d • Coupons – certificates that entitle customers to cash discounts on goods or services.

11. Consumer Promotion cont’d • Premiums – low cost items given to consumers at a discount or for free. Examples would be factory packs, in-packs are free gifts given out or placed in product packages. (popular with cereal manufactures) • The fundamental concept is that people will be more motivated to buy a product when they are offered an added-value gift in exchange

12. Consumer Promotion cont’d • Deals – short term price reduction marked directly on package. Ex. Two similar products bound together for the price of one. • Incentives – create customer excitement and increase sales. Examples would be contests, sweepstakes, and rebates.

13. Consumer Promotion cont’d • Product Samples – Free trial size of a product sent through the mail, delivered door-to-door, or given away at stores or trade shows.

14. Consumer Promotion cont’d • Sponsorship – Company pays a fee to promote itself and its product or services on a set location. • A high-profile medium!

15. Consumer Promotion cont’d • Product Placement – Using a brand name product in either a movie, TV show, or a sporting event. • Ex. In TV series Survivor the winning groups were given Doritos and Mountain Dew as treats. Also the movie You’ve Got Mail and the James Bond catalog.

16. Consumer Promotion cont’d • Loyalty Marketing Campaigns – AKA frequent buyer programs.

17. Let’s Review • Why do businesses use sales promotions? • Explain the difference between trade and consumer promotions. • Why is sponsorship such an effective promotional tool? • What is the purpose of loyalty marketing campaigns?

18. Today’s Activity • Choose one type of promotion we learned today and apply it to the boutique from the Do Now. • Be prepared to share with the class 