Chapter 11

Sales Promotion and Point of Purchase

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1. Explain the importance and growth of sales promotion.

2. Describe the main sales promotion techniques used in the consumer market.

3. Describe the main sales promotion techniques used in the trade channel and business markets.

4. Identify the risks to the brand of using sales promotion.

5. Understand the role and techniques of point-of-purchase advertising.

6. Describe the role of support media in a comprehensive integrated marketing communication plan.

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Role of Sales Promotion

• Sales promotions use incentives to motivate action by • consumers• members of the trade channel• business buyers.

• Sales promotions serve different purposes than mass-media advertising does, and many companies spend more on sales promotions than ever before.

• Reasons for greater reliance on promotions include: • pressure on marketing managers for greater accountability• short-term marketing orientations• deal-prone shoppers• brand proliferation • the increasing power of large retailers• media clutter

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Consumer Sales Promotion

• Objectives for consumer-market sales promotions include:

• stimulate trial purchases

• stimulate repeat purchases

• introduce a new brand

• contribute to IMC effort

• combat or disrupt competitors’ strategies

• stimulate larger purchases

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Consumer Sales Promotion, Continued

• Techniques for consumer-market sales promotions include:

• Coupons, price-off deals, phone and gift cards, and premiums (free and self-liquidating) and advertising specialties provide obvious incentives for purchase.

• Contests, sweepstakes, and product placements can be excellent devices for stimulating brand interest.

• Trial offers and a variety of sampling techniques help get a product into the hands of the target audience:

• in-store sampling

• door-to-door sampling

• mail sampling

• newspaper sampling

• on-package sampling

• mobile sampling

• Rebates and frequency programs provide rewards for repeat purchase.

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Sales Promotion to the Trade and Business Buyers

• Objectives for trade-market sales promotions include:

• obtaining initial distribution

• increasing order size

• encouraging cooperation with consumer-market sales promotions

• increasing store traffic

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Sales Promotion to the Trade and Business Buyers, Continued

• Techniques for trade-market sales promotions include:

• incentives (push-money)

• allowances

• merchandise allowances

• slotting fees

• bill-back allowances

• off-invoice allowances

• sales-training

• vertical cooperative advertising

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Sales Promotion to the Trade and Business Buyers, Continued

• Techniques for business-market sales promotions include:

• trade shows

• business gifts

• premiums and advertising specialties

• trial offers

• frequency programs

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Risks of Sales Promotion

• The risks of sales promotions include:

• creating a price orientation/lowering brand image

• borrowing from future sales

• alienating customers

• time and expense

• legal considerations

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Point-of-Purchase (P-O-P) Advertising

• Point-of-purchase (P-O-P) advertising refers to materials used in the retail setting to attract shoppers’ attention to a firm’s brand, convey primary brand benefits, or highlight pricing information.

• P-O-P displays may feature price-off deals or other consumer and business sales promotions.• P-O-P objectives include:

• 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.

• P-O-P formats include: • Short-term promotional displays (used for six months or less) • Permanent long-term displays (used for more than six months).

• In trade and business markets, P-O-P displays encourage retailers to support one manufacturer’s brand over another; they can also be used to gain preferred shelf space and exposure in a retail setting.

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Support Media

• The traditional support media include outdoor signage, billboard, transit, aerial, and directory advertising.• Billboards and transit advertising (out-of-home media) are excellent means for carrying simple messages into

specific metropolitan markets. • To assess locations, the industry sends individuals to ride the boards.• Aerial advertising can also be a great way to break through the clutter and target specific geographic markets in

a timely manner. However, this is becoming diluted because of reductions in costs.• Directory advertising, primarily the Yellow Pages directories, can be a sound investment because it helps a

committed customer locate an advertiser’s product.• Packaging can be considered in the support media category because the brand’s package carries important

information for consumer choice at the point of purchase including the brand logo and “look and feel” of the brand.

• Guerilla marketing is becoming more commonly adopted by marketing firms as their primary promotional style.

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