Adv. & Sales Promotion

8/7/2019 Adv. & Sales Promotion

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1 2009 South-Western, a part of Cengage Learning

Sales Promotion, Point-of-PurchaseAdvertising, and Support Media

Presented by

Prof. B. Manchanda

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Part Five: Integrated Brand

Promotion

We have considered the Process, Planning,

Preparation, and Placement of advertising and

IBP in the first Four Parts of the book

Now we take a detailed look at the full range of

IBP tools available to the advertiser

Each of these IBP tools has a unique capability

to influence audience perception of a brand

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Sales Promotion--Defined

Using incentives to create aperception of greater brand value

Consumer Market sales promotion Induce household consumers to purchase a firms

brand

Trade-Market sales promotion Motivate distributors, wholesalers, and retailers to stock

and feature a brand

Business Market sales promotion Cultivate buyers in large corporations who make

purchase decisions

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Sales Promotion Examples

Coupons

Price-off deals

Premiums

Contests

Sampling

Sweepstakes

Brand placements

Incentives

Loyalty Programs Trade Shows

AllowancesGift Cards

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Point of Purchase Displays


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Sales Promotion vs.

Advertising

Short term demand vs. long term demand

Encourages brand switching vs. brand loyalty Induces trial use vs. encourage repeat purchase

Promotes price vs. image

Immediate results vs. long term effects

Measurable results vs. difficult to measure

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Importance of Sales

Promotion

$300 billion in 2008

Growth rate: 4-8 percent

Reasons for growth: Demand for accountability

Short-term orientation

Consumer response to promotions

Proliferation of brands

Increased power of retailers

Media clutter

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Objectives for Consumer-

Market Sales Promotion

1. Stimulate trial purchase

2. Stimulate repeat purchases3. Stimulate larger purchases

4. Introduce a new brand

5. Combat or disrupt competitors

6. Contribute to IBP

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Consumer-Market Sales

Promotion Techniques

1. Coupons 2. Price-off deals

3. Premiums 4. Contests/sweeps5. Samples & trials 6. Phone gift cards

7. Brand placements 8. Rebates

9. Frequency programs

10.Event sponsorship

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Coupons

Entitles a buyer to a price reductionfor a product or service

Advantages Give a discount to price sensitive consumer while

selling product at full price to others

Induce brand switching

Timing and distribution can be controlled Stimulates repeat purchases

Gets regular users to trade up within a brandarray

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Coupons are

the most

widely usedform of

consumer

sales

promotion.

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Ad in Context Example


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Coupons

Disadvantages

Time of redemption cannot becontrolled

No way to prevent current customersfrom redeeming coupons

Coupon programs require costlyadministration

Fraud is a serious, chronic problem

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Price-Off Deals

Offers consumer reduced price atpoint of purchase through speciallymarked packages

Advantages Controllable by manufacturer

Can effect positive price comparisons

Consumers believe it increases value

of a known brand Disadvantage

Retailers believe it creates inventoryand pricing problems

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Premiums and Advertising

Specialties

Premiums: free or at a reducedprice with another purchase

Free premiums provide item at nocost

Self-liquidating premiums requireconsumers to pay most of the

cost of the item Advertising specialties:

A message placed on a free, usefulitem

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Premiums attract

attention to a brand and

offer the consumer

something for free.

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Contests and Sweepstakes

Contests: consumers compete for prizesbased on skill or ability.

Sweepstakes: winners picked by chance

Both create excitement and interest

But . . . Legal and regulatory requirements are

complex

Consumers may focus on the game ratherthan the brand

Difficult to get an IBP message across in agame

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Samples and Trial Offers

Sampling: Giving consumer anopportunity to use a brand on a trial basiswith little or no risk

Types of sampling In-store (Costco) Newspaper

Door-to-door On-package

Mail Mobile (on-site)

Trial offers Used for more expensive items

Consumer tries product for a fixed time

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Phone and Gift Cards

Manufacturers offer either for freeor for purchase debit cards

with phone time

or preset spending limits

Examples include offers from

Starbucks, Barnes & Noble, andThe Gap

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Rebates

Money back offer requiring the buyer to

mail a request for money back from the

manufacturer

Often tied to multiple purchases

Many consumers fail to bother sendingin the rebate request form

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Frequency Programs

Also known as continuityprograms

Offers customers discounts orfree products for repeatpatronage

Common in airline, hotel, andrestaurant businesses

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Objectives for Promotions in

the Trade Market

Objectives: Uses a push strategy:Push the product into thedistribution channel to the

consumer:Obtain initial distribution

Increase order size

Encourage cooperation with

consumer market sales promotions Increase store traffic

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Trade-Market Sales


Incentives: Push money

Allowances: Merchandise allowances, slotting fees, bill-

back allowances, off-invoice allowances

Sales Training Programs

Cooperative (Co-Op) Advertising

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Business Market Sales


Trade Shows

Business gifts

Premiums and advertising specialties

Trial offers Frequency programs

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Trial offers are very

effective in the business

market. Why?

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Risks of Sales Promotion

Create a price orientation

Borrow from future sales

Alienate loyal customers

Time and expense

Legal considerations

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Point of Purchase (P-O-P)

Advertising

Definition Materials used in the retail setting to attract shoppers

attention to a brand, to convey primary product benefits, or

highlight pricing information. Displays may feature price-off deals as well.

Objectives forPoint-of-Purchase Advertising Draw consumers attention to a brand in the retail setting.

Maintain purchase loyalty among brand loyal users.

Stimulate increased or varied usage of the brand.

Stimulate trial use by users of competitive brands.

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P-O-P Advertising and the

Trade and Business Markets

Product displays and information sheets encourageretailers to support one distributor or manufacturersbrand over another.

P-O-P promotions can help win precious shelf spaceand exposure in a retail setting.

A P-O-P display should be designed to draw attentionto a brand, increase turnover, and possibly distribute

coupons or sweepstakes entry forms.

To combat losing business to online shopping,retailers are trying to enliven the retail environment,and point-of-purchase displays are one strategy.

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Support Media

Purpose: To reinforce or extend a messagebeing delivered through other media

Signs, billboards, posters

Transit

Aerial

Specialty

Directory


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Outdoor Signage and

Billboards

Advantages

Wide local

exposure Captivating

Around-the-clock

exposure

Address an

immediate need or

desire

Disadvantages

Message limits

Location affectsimpact

Relatively expensive

Criticized byenvironmental

groups


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Transit Ads

Transit Ads

Urban environments

Demographic segmentation

Timely to purchase

Build brand awareness


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Transit ads

can reach a

targetaudience in

well defined

geographic

areas.

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Aerial Ads

Aerial Ads

Blimps increasingly

common Common at sporting

events

Skies are getting

crowded! Networks are in

control


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Directory Advertising

Advantages

High acceptance

High availability

Final link to

purchase

Disadvantages

Too many

directories Long lead times

Limited creativity

New: CD-ROM and Web-

based directories


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Web based

directories

offerconvenience

and speed.

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Packaging

Promotional Benefits of Packaging to the

Advertiser:

The package carries the brand name and logo

The package can communicate value

The package can communicate image andquality

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Packaging

highlightsthe brand

name,

quality

and image.



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When Support Media are

More than Support Media

Guerrilla MarketingStunt promotions

Viral campaignsUsing influencers(Chapter 20)

Special EventsCreating visibility and

affinity for a brand among a highly selecttarget group

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Adv. & Sales Promotion

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