Sales Promotion
Sales Promotion Vehicles Long-Term Allocations to Advertising, Trade Promotions and Consumer Promotions Reasons for Increase in Sales Promotion Growing Power of Retailers Declining Brand Loyalty Increased Promotional Sensitivity Brand Proliferation Fragmentation of Consumer Markets Short-Term Focus Increased Accountability Competition Clutter Sales Promotion Uses Introduce new products by encouraging trial and repurchase Get existing customers to buy more Attract new customers Defend current customers Maintain sales in off season Target a specific market segment Enhance IMC efforts and build brand equity Arm & Hammer uses a promotion offer to encourage new uses of its product Consumer Franchise-Building (CFB) Promotions CFB Promotional Objectives Communicate distinctive brand attributes Develop and reinforce brand identity that is consistent with the image of the brand Build long-term brand preference Encourage repeat purchase and long-term patronage Engage active consumer involvement Nonfranchise-Building(non-FB) Promotions Non-FB Promotions May Include Price-off deals Bonus packs Rebates or refunds Non-FB Promotions shortcomings Trade promotions benefits may not reach customers Customers may ¡°buy on the basis of price rather than brand equity Do not encourage the development of brand loyalty
Sales Promotion Vehicles
Long-Term Allocations to Advertising, Trade Promotions and Consumer Promotions
Reasons for Increase in Sales Promotion
Sales Promotion Uses
Arm & Hammer uses a promotion offer to encourage new uses of its product
Consumer Franchise-Building (CFB) Promotions
CFB Promotional Objectives Communicate distinctive brand attributes Develop and reinforce brand identity that is consistent with the image of the brand Build long-term brand preference Encourage repeat purchase and long-term patronage Engage active consumer involvement
CFB Promotional Objectives
Nonfranchise-Building(non-FB) Promotions
Objectives of Consumer-Oriented Sales Promotion
Contests can be used to build brand equity Percentage of Promotions Vehicles Used by Package Goods Manufacturers Sampling
Contests can be used to build brand equity
Percentage of Promotions Vehicles Used by Package Goods Manufacturers
Sampling
Sampling works best when : The products are of relatively low unit value, so samples don't cost much The products are divisible and can be broken into small sizes that can reflect the products features and benefits The purchase cycle is relatively short so the consumer can purchase in a relatively short time period
Sampling works best when :
Sampling Methods Door-to-door Direct mail In-store sampling Cross-product sampling With newspaper or magazine Through the internet Samples are often distributed with local newspapers Coupons The oldest and most widely used sales promotion tool Nearly 240 billions distributed each year in the United States 80 percent of consumers use coupons and 25% use them regularly Advantages and Limitations of Coupons Advantages: Appeal to price sensitive consumer Can offer price break without retailers coop Can be effective way to induce trial of new or existing products Can be way to defend market share and encourage repurchase Disadvantages Difficult to determine how many consumers will use coupons and when Coupons are often used by loyal consumers who may purchase anyway Declining redemption rates and high costs of couponing Misredemption and fraud Coupon Fraud Consumers redeem without purchase Clerks and staff exchange for cash Managers/owners redeem without sale Criminals collect or counterfeit and sell Coupon Distribution Percent of sales made with coupons for various products Coupon Trends Major companies cutting back on use of coupons Searching for more effective coupon techniques More use of internet for distribution Premiums
Sampling Methods
Samples are often distributed with local newspapers
Coupons
Advantages and Limitations of Coupons
Advantages: Appeal to price sensitive consumer Can offer price break without retailers coop Can be effective way to induce trial of new or existing products Can be way to defend market share and encourage repurchase Disadvantages Difficult to determine how many consumers will use coupons and when Coupons are often used by loyal consumers who may purchase anyway Declining redemption rates and high costs of couponing Misredemption and fraud
Advantages:
Disadvantages
Coupon Fraud
Coupon Distribution
Percent of sales made with coupons for various products
Coupon Trends
Premiums
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
Two types of premiums:
Airline miles are a very popular premium incentive Contests and Sweepstakes Other Popular Consumer Sales Promotion Tools Refunds and Rebates Bonus Packs Price-off deals Frequency/loyalty programs Event marketing Gerber developed a sweepstakes in conjunction with a loyalty program Trade-Oriented Sales Promotion Objectives Obtain Distribution of New Products Maintain Trade Support for Existing Products Encourage Retailers to Display and Promote Existing Brands Build Retail Inventories Chicken of the Sea targets the trade with this collateral piece Types of Trade-Oriented Promotions Contests and Incentives Trade Allowances Buying Allowances Promotional Allowances Slotting Allowances ? Point-of-Purchase Displays Sales Training Programs Trade Shows Cooperative Advertising Promotion Targeted to Reseller Salespeople Product or program sales Selling a specific number of cases Selling a specific number of units Selling a specific number of promotional programs New account placements Number of new accounts opened Number of new accounts ordering a minimum amount Promotional programs placed in new accounts Merchandising efforts Establishing promotional programs Placing display racks, counter and other p-o-p displays Types of cooperative advertising Horizontal cooperate advertising Ingredient-sponsored cooperative advertising Vertical cooperative advertising The ¡°Intel Inside¡± campaign is an example of ingredient-sponsored cooperative advertising Coordinating Sales Promotion With Other IMC Elements Budget allocation Coordination of ad and promotion themes Media support and timing Measuring effectiveness
Airline miles are a very popular premium incentive
Contests and Sweepstakes
Other Popular Consumer Sales Promotion Tools
Gerber developed a sweepstakes in conjunction with a loyalty program
Trade-Oriented Sales Promotion Objectives
Chicken of the Sea targets the trade with this collateral piece
Types of Trade-Oriented Promotions
Promotion Targeted to Reseller Salespeople
Types of cooperative advertising
The ¡°Intel Inside¡± campaign is an example of ingredient-sponsored cooperative advertising
Coordinating Sales Promotion With Other IMC Elements
The Sales Promotion Dilemma
Shifting Role of Sales Promotion Agencies
Background of IMC Group
Company introduction
Advertisement planning
Commonweal advertisement
Broadcast Media
Communication Process