13-1 Copyright © 2009 Pearson Education Canada CHAPTER 13 Sales Promotion.
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Transcript of 13-1 Copyright © 2009 Pearson Education Canada CHAPTER 13 Sales Promotion.
13-2 Copyright © 2009 Pearson Education Canada
Learning Objectives
Identify the roles of various consumer and trade promotion activities in the marketing communications process
Outline the nature of various consumer and trade promotion activities
Assess the strategies for integrating sales promotions into the marketing communications mix
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Activity that provides special incentives to bring about immediate response from:
Consumers,
Distributors,
Organization’s sales force.
Sales Promotion
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Sales Promotion
Can be subdivided into 2 broad categories:
1. Consumer promotionsDesigned to stimulate purchases by consumers (ultimate
users)Help pull the product through the distribution channels focus on achieving trail purchase and repeat multiple
purchases and building brand loyalty.
2. Trade PromotionsDesigned to encourage distributors to purchase more
additional volume and provide encouraging merchandise support to stimulate consumer purchase.
Help push the product through the distribution channels
13-5 Copyright © 2009 Pearson Education Canada
Sales Promotion Planning
In today’s environment, where planners consider an integrated marketing approach, sales promotions are not viewed as separate entities
Sales Promotions are planed at the same time to ensure that synergies are achieved across all forms of communications.
Promotion activity must complement the total marketing effort.
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Sales Promotion Objectives
Objectives of consumer promotions focus on achieving:Trial purchaseRepeat or multiple purchasesBuilding brand loyalty
Objectives of trade promotions focus on:Selling more volume of merchandiseEncouraging merchandising support among channel members that buy and resell products.
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Pull
MarketerMarketer ConsumerConsumerWholesalerWholesaler RetailerRetailer
MarketerMarketer ConsumerConsumerWholesalerWholesaler RetailerRetailer
Promotion Strategy
Push
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Consumer Promotion – Pull Strategy
Pulls the product through the channel
MarketerMarketer DistributorsDistributors ConsumersConsumers
Objectives: Trial purchase Brand loyalty Multiple purchase
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Coupons Free Samples Contests Cash Refunds Premium Offers Loyalty (Frequent- Buyer) Programs Delayed Payment Incentives Combination Offers
Types of Consumer Promotion Activity
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Objectives of Coupon Programs
Non-brand users to make trail purchase
Maintain current users
Speed up acceptance of a new product
Encourage current customers to repurchase the brand (build loyalty)
Attract users of competitive brands
Encourage multiple purchases
Increase seasonal sales
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Coupons can be delivered to consumers in four different ways, by:
Product
Media
In-Store at the point-of-purchase
Electronically
Methods of Coupon Distribution
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Free product distributed to potential users in a trial or regular size, effective for achieving trial purchase. In-store samples most common, plus:
Cross-sampling
Co-operative direct mail
Event sampling
Sample packs
Free Samples
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Contests are designed and implemented to create temporary excitement about a product.
Sweepstakes
Games / Instant Wins
Successful contests have significant media advertising support.
Contests
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Money returned directly to the consumer by the manufacturer after the purchase has been made.
Reinforce loyalty and multiple purchases
Slippage commonly occurs
Successful refund offers require strong P-O-P support
Cash Refunds (Rebates)
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An item offered free or at a bargain price to encourage consumers to buy a specific product. It is usually offered three ways.
1. Mail-in
2. In/On Pack
3. Coupon Offer at P-O-P
Premium Offers
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A frequent buyer program offers consumers a bonus, such as points or “play money.”
Canadian Tire Money
Club Z at Zellers and Bay
Shoppers Drug Mart’s Optimum Card
The goal is to encourage loyalty through repeat purchases.
Loyalty (Frequent-Buyer) Programs
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Delayed Payment Incentives
Consumers are granted a grace period during which he or she pays no interest or principal for the item purchased.Leon’s “Don’t Pay a Cent Event”Home Depot
For renovations and household repairs, they offer six-month and one-year interest-free financing packages
This gives them a competitive edge over independent contractors who demand payment when jobs are completed.
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Pushes the product through the channel
ConsumersConsumersMarketerMarketer DistributorsDistributors
Objectives: Secure listings Build sales volume Secure merchandising support
Trade Promotion – Push Strategy
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Trade Allowance
Performance Allowance
Co-operative Advertising Allowance
Continued…
Trade Promotion Planning
Three basic objectives: secure a listing, build volume, and encourage merchandise support.
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Retail In-Ad Coupons
Dealer Premiums
Collateral Material
Dealer Display Material (P-O-P)
Trade Shows
Branded Promotion Merchandise
Trade Promotion Planning (cont.)
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In the packaged goods market there has been a steady shift toward trade promotion, largely due to:
Media Fragmentation
Demand for accountability
Buying-Power Concentration
Trends in Sales Promotion Planning
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Promotion strategies must be integrated with other marketing communications activities. Strategic decisions must consider:
Frequency of Promotion Activity
Promotion/Product Relationships
Creative Strategy
Media Strategy
Sales Promotion Integration with Marketing Communications