Sales Promotion, Point-of-Purchase Advertising, and Support Media

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Coordination ChallengeDirectoriesEvents

Transit

Billboards

Television

BrandedEntertainment

Magazines

Internet

Radio

Traditional Support Media• Purpose: To reinforce or extend a

message being delivered through other media– Signs, billboards– Transit– Aerial– Specialty– Directory

Outdoor Signage and Billboards• Advantages

– Wide local exposure

– Captivating– Around-the-clock

exposure– Address an

immediate need or desire

• Disadvantages– Message limits– Location affects impact– Relatively expensive– Criticized by environmental groups

Transit Ads• Transit Ads

– Urban environments– Demographic segmentation– Timely to purchase– Build brand awareness

Aerial Ads• Aerial Ads

– Blimps increasingly common– Common at sporting events– Networks are in control

What is Vehicle Wrapping?• Vehicle wrapping is a form of outdoor advertising

• Digitally-generated graphics are printed on vinyl, and subsequently “wrapped” onto vehicles

• Has become an international advertising medium

Outdoor Advertising - An Overview

• U.S. advertisers spent $4.8 billion on outdoor media in 1999

• Outdoor ads represent 2% of all advertising media

• Growing approximately 10% per year

• Growth is faster than:– Total Advertising Expenditures– Gross Domestic Product (GDP)

The Power of the Personal Vehicle

• Spends two hours per day in a car• Averages 48 miles per day on the weekends• Makes four or five trips each day

• 125 million Americans commute to work daily• Daily trips have increased by 110% since 1970• Total number of cars on the road is up over 174%• Motorists travel 3.4 trillion miles each year

The Average Person:

Source: Federal Highway Administration

Outdoor Advertising Association of America (OAAA)

Wrapping for the Advertiser

• Advertisers approach trucking companies, dealerships, etc. to “use” their vehicle(s)

• Costs from $500 to $2500 to wrap an automobile

• The use of vinyl technology has made the medium more cost effective

• Aids in helping build awareness or maintain brand image

Continued . . .

• Global Positioning System (GPS)– Satellite-based tracking system

– Installed by plugging device into cigarette lighter

– Provides 24-hr., three dimensional position, velocity and time information

– Updates data every four minutes

– Is key in determining OTS (opportunity to see)

Wrapping for the Consumer

Companies such as Autowraps, Media Vehicles and Ads on Wheels are designed to accommodate people

who would like to have their vehicle wrapped

http://www.adsonwheels.com

http://www.autowraps.com

http://www.mediavehicles.com

Continued. . .Three Types of Vehicle Wrapping

• Full Wrap– Covers entire exterior, including windows– Driver is paid $450 max per month

• Decal Graphic– Requires only 50%exterior coverage, usually a

large graphic or text image– Driver is paid $250 max per month

• Window Wrap – Covers two rear windows and back windshield– Driver is paid $150 max per month

Maintenance

• Takes 8 hrs for full wrap

• Takes 4 hrs for decal and/or window wrap

• Installation takes place within 30 mile radius of driver

• Driver is asked to provide proof of insurance, a DMV report, and sign agreements

• Required to drive approx. 1000 hours per month

• Meet with field monitor for a monthly inspection, and to switch out GPS system

Businesses - Advantages• Can provide exposure in urban areas and on the

interstate

• Allows for outdoor advertising where no billboard space exists

• Have the ability to entertain, educate and inform

• Geographic and demographic flexibility

• This form of advertising is less intrusive and annoying than other forms

Businesses - Disadvantages

• Must maintain message control – Social Responsibility– I.e. “Make 7…Up Yours”

• Cannot be used as the sole promotional tool– Component of an overall communications mix

Consumer - Advantages

• Generate extra income

• Low-end and high-end cars are used

• Some companies are willing to donate their wrapped vehicles if motorists will drive them

• Great for those with no mode of transportation

• Some companies sell their wrapped vehicles at special discount rates

Consumer - Disadvantages

• Too eye-catching for the open road

• “Sophisticated Graffiti”

• Could spark an onslaught of spray painting on buildings, cars and trucks

• Difficult to break contracts

Airport Advertising: Dioramas

The following airport advertising info is from Yong Jun Sung & Pumsoon Park

- the first and most commonly utilized

- located throughout the terminals in arrivals, departures, ticketing and baggage claim areas - Wall, shelter, and king-size dioramas

Wraps

- The most widely used form of U.S.

- Applied to flat surfaces (walls, windows, and floors)

- Flexible in size and shape

- For short or long term campaign

Cylinder Showcases

- Highly visible units

- Display products and services

- Secure setting for products such as perfume, jewelry, fashions, and ceramics

SkyScreens (Plasma)

- Provide digital advertising and information

- At high-traffic passenger cluster areas

- Catch the eyes of people

Baggage Cart Sponsorships

- Deliver total audience coverage

- Message frequency

Others

Bus shelter

Leaflet dispensers

Kiosks

Message Effectiveness

High recall rates for airport advertising

Traveler arrive at airport 57 minutesPrior to departureOn average

On average Passengers spend 93 minutes at the airport

How We Measure?

1. Overall airport traffic Ex) World airport ranking by total passengers 1999

Atlanta – 78,092,940 (Rank #1)JFK, NY – 31,700,604 (Rank #20)

Orlando – total passengers 29,203,755 (Rank #24)

2. The number of brochures or leaflets taken from displays

Rate examplesJFK International Airport (NY) Orlando International Airport

Annual Passenger

Monthly Passenger

31,700.604 29,203,755

2,641,717 2,433,644

Popular Vehicles

Diorama $ 4,000 $ 3,300

Spectacular $ 12,000 $ 9,500

Exhibition Area $ 24,000 $ 8,000Interactive Courtesy

Phone Center $ 2,000 $ 1,500

SkyScreen $ 35,000 $ 25,000

JFK Airport (NY) Orlando Airport

43” x 62”

7’ x 11’

16” x 10”

6’ x 4’

Size

* per month & unit

Directory Advertising:CD-ROM and Web-based

Directories• Disadvantages

– Too many directories

– Long lead times– Limited creativity

• Advantages– High acceptance– High availability– Final link to

purchase

Power Struggles and Sales Promotion

• Sales promotion plays a key strategic role in the channel of distribution– Big name brands must be supported with sales promotion

and POP to get the support of retailers through self space allocation.

– The top 10 retailers control 43% of all packaged goods sales so they can dictate which brands get how much shelf space.

– Brand marketers spend $30 billion a year on sales promotion and POP to gain favored retailer treatment and to provide incentives to household consumers and business buyers.

Sales Promotion• Using incentives to create a perception of

greater brand value– Consumer Market

• Induce household consumers to purchase a firm’s brand

– Trade-Market• Motivate distributors, wholesalers, and retailers to

stock and feature a brand– Business Buyer

• Cultivate buyers in large corporations who make purchase decisions

Sales Promotion Examples

Coupons

Price-off deals

Premiums

Contests

Sampling

Sweepstakes

Brand placements

Incentives

Loyalty programs

Trade shows

AllowancesGift Cards

Sales Promotion vs. Advertising• Short term demand vs. long term demand• Encourage brand switching vs. brand loyalty• Induce trial use vs. encourage repeat

purchase• Promote price vs. promote image• Immediate results vs. long term effects• Measurable results vs. difficult to measure

Importance of Sales Promotion

• $100 plus billion industry• 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

Objectives for Consumer-Market Sales Promotion

1. Stimulate trial purchase

2. Stimulate repeat purchases

3. Stimulate larger purchases

4. Introduce a new brand

5. Combat or disrupt competitors

6. Contribute to IMC

Consumer-Market Sales Promotion Techniques

1. Coupons2. Price-off deals3. Premiums4. Contests/sweeps5. Samples and

trials

6. Phone gift cards7. Brand

placements8. Rebates9. Frequency

programs10.Event

sponsorship

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Coupons

• Entitles a buyer to a price reduction for 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 brand array

Coupons (cont’d)

• Disadvantages– Time of redemption cannot be controlled– No way to prevent current customers from

redeeming coupons– Coupon programs require costly

administration– Fraud is a serious, chronic problem

Price-Off Deals• Offering consumers a reduced price at point of

purchase through specially marked packages• Advantages

– Is controllable by manufacturer.– Affects positive price comparisons.– Increases consumers’ belief in the value of a known

brand.• Disadvantage

– Retailers believe it creates inventory and pricing problems.

Premiums and Advertising Specialties

• Premiums– Free or reduced price for an item with the purchase

of another item.• Free premiums provide item at no cost.• Self-liquidating premiums require consumers to

pay most of the cost of the item• Advertising specialties:

– A message placed on a free, useful item

Contests and Sweepstakes

• Contests: consumers compete for prizes based 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 rather than the

brand.• Difficult to get an IBP message across in a game.

Nordstrom Launches 'Twilight' Line, Gives Away Tickets to 'New Moon' Premiere

Samples and Trial Offers• Sampling

– Giving a consumer an opportunity to use a brand on a trial basis with little or no risk

• Types of sampling– In-store – Newspaper– Door-to-door – On-package– Mail – Mobile

• Trial offers– Used for more expensive items– Try product for a fixed time– Trader Joes Example

Gift Cards

• Manufacturers offer either for free or for purchase debit cards.– With phone time– Or with preset spending limits

• Examples– Offers from Sephora, and The Gap.

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 sending the

request.• Canon example

Frequency Programs

• Also known as “continuity programs”– Offer customers discounts or free products for

repeat patronage– Common in the airline, travel, and restaurant

businesses

Objectives for Promotions in the Trade Market

• Objectives: Use a “push” strategy– Push a product into the distribution channel

towards the consumer• Obtain initial distribution• Increase order size• Encourage cooperation with consumer market

sales promotions• Increase store traffic

Trade-Market Sales Promotion Techniques

• Incentives: Push money• Allowances: Merchandise allowances,

slotting fees, bill-back allowances, off-invoice allowances

• Sales Training Programs• Cooperative (Co-Op) Advertising

Business Market Sales Promotion Techniques• 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?

Sales Promotion, the Internet, and New Media

• Sampling removes risk associated with consumer trial.

• Internet firms use incentives to make Web sites “sticky.”

• Internet is used to implement sales promotions and distribute coupons.

Risks of Sales Promotion• Creates a price orientation• Borrows from future sales• Alienates consumers• Time and expense• Legal considerations

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

• Materials used in the retail setting to attract shoppers’ attention to a brand, to convey primary product benefits, or highlight pricing information.

• Objectives for P-O-P 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.

P-O-P Advertising and the Trade and Business Markets

• Product displays and information sheets encourage retailers to support one distributor or manufacturer’s brand over another.– P-O-P promotions can help win precious shelf space

and exposure in a retail setting. – A P-O-P display is designed to draw attention to 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 P-O-P displays are one strategy.

Coordination Challenge

• Message coordination• Media coordination• Research conclusions:

– Short-term effects can be dramatic.– Short-term effects are often not profitable.– Rare for long-term effects to occur.– Most power effects result from advertising and

sales promotion being used together.