Copyright © 2012 Pearson Canada Inc. CHAPTER 13 Sales Promotion 13-1.
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Transcript of Copyright © 2012 Pearson Canada Inc. CHAPTER 13 Sales Promotion 13-1.
Copyright © 2012 Pearson Canada Inc.
CHAPTER 13
Sales Promotion
13-1
Copyright © 2012 Pearson Canada Inc.
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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Copyright © 2012 Pearson Canada Inc.
Sales Promotion
Activity that provides special incentives to bring about immediate response from:
Consumers,
Distributors,
Organization’s sales force.
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Sales PromotionCan be subdivided into two main categories:
Consumer promotions stimulate consumer purchases (through coupons,
contests and other frequent-buyer programs). Help pull the product through the distribution channel
Trade Promotions Encourage distributors to purchase more volume and
provide additional merchandise support to stimulate consumer purchase.
Help push the product through the distribution channels
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Copyright © 2012 Pearson Canada Inc.
Sales Promotion Planning
Today, Sales Promotions are not viewed as separate entities from advertising
Sales Promotions are planned at the same time to ensure synergies are achieved across all forms of communications.
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Sales Promotion Objectives
Promotion activity must complement the total marketing effort
Should be realistically achievable, measurable, highly focused, and capable of being evaluated and modified.
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Pull and PushPromotion Strategies
Pull: the organization creates demand by directing promotional efforts at consumers or final users of a product. Push: the organization creates product demand by directing promotional efforts at intermediaries, who in turn promote the product to consumers.
MarketerMarketer ConsumerConsumerWholesalerWholesaler RetailerRetailer
Pull
Push
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Consumer Promotion Planning
Pull Strategy pulls the product through the channel
MarketerMarketer DistributorsDistributors ConsumersConsumers
Objectives: Trial purchase Brand loyalty Multiple purchase
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Types of Consumer Promotion Activity
Coupons Free Samples Contests Cash Refunds Premium Offers Loyalty (Frequent-Buyer) Programs Delayed Payment Incentives Combination Offers
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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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Methods of Coupon Distribution
Coupons can be delivered to consumers in four different ways, by: Media
Product
In-Store
Digitally
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Free SamplesFree product distributed to potential users, effective for encouraging trial purchase.
In-store samples (most common)
Cross-sampling
Co-operative direct mail
Event sampling
Sample packs
Experiential (also called On-Site)
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ContestsContests are designed and implemented to create temporary excitement about a product.
Sweepstakes
Games / Instant Wins
Successful contests have significant media advertising support.
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Cash Refunds (Rebates)
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
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Copyright © 2012 Pearson Canada Inc.
Premium Offers
An item offered free or at a bargain price to encourage consumers to buy a specific product. It is usually offered three ways.
Mail-in
In/On Pack
Coupon Offer at P-O-P
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Copyright © 2012 Pearson Canada Inc.
Loyalty (Frequent-Buyer) Programs
A frequent buyer program offers consumers a bonus, such as points or “play money.”
Canadian Tire Money
Frequent flyer programs Aeroplan / Airmiles
Safeway’s Club Card Encourage loyalty through repeat purchases
Generate data on purchase patterns, combinations
Allow for “price promotion” without undermining list price
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Delayed Payment IncentivesConsumers are granted a grace period during which no interest or principal are paid for the item purchased. Leon’s “Don’t Pay a Cent Event” Home Depot:
offers six-month and one-year interest-free financing on renovations and home repairs.
offers financing; By contrast independent contractors demand payment
when jobs are completed.
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Trade Promotion – Push Strategy
Pushes the product through the channel
ConsumersConsumersMarketerMarketer DistributorsDistributors
Objectives: Secure listings Build sales volume Secure merchandising support
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Trade Promotion Activity
Three basic objectives: secure a listing, build volume, and encourage merchandise support.
Trade Allowance
Performance Allowance
Co-operative Advertising Allowance
Continued…
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Trade Promotion Planning (cont.)
Retail In-Ad Coupons
Dealer Premiums
Collateral Material
Dealer Display Material (P-O-P)
Trade Shows
Branded Promotion Merchandise
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Copyright © 2012 Pearson Canada Inc.
Sales Promotionand Media Strategy
A media mix is usually needed to achieve the communications goals of a promotion plan
The budget is spent in a concentrated period to generate high levels of awareness for the promotion.
Print Media Broadcast Media Online Media
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Sales Promotion Integration with Marketing Communications
Promotion strategies must be integrated with other marketing communications strategies. Strategic decisions must consider:
Frequency of Promotion Activity
Brand Image and promotions
Building brand equity
13-23