Trade-Oriented and Consumer-Oriented Sales Promotions

Trade-Oriented and Consumer-Oriented Sales Promotions PowerPoint PPT Presentation

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Objectives. To discuss the role of sales promotion in influencing the trade (wholesalers, retailers, salespeople)To discuss the role of sales promotion in influencing the behavior of consumers. Trade- Oriented Promotions. Directed at wholesalers, retailers, and other marketing intermediariesFirst

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Trade-Oriented and Consumer-Oriented Sales Promotions

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1. Trade-Oriented and Consumer-Oriented Sales Promotions Business 9318, Fall 2001 Dr. Katherine Gallagher

2. Objectives To discuss the role of sales promotion in influencing the trade (wholesalers, retailers, salespeople) To discuss the role of sales promotion in influencing the behavior of consumers

3. Trade- Oriented Promotions Directed at wholesalers, retailers, and other marketing intermediaries First step in the sales promotion effort Theoretically, the incentives are passed on to consumers

4. Objectives Obtain distribution for new products Maintain trade support for established brands Encourage retailers to display established brands Build retail inventories

5. Characteristics of Successful Trade-Oriented Promotions Financial incentive Correct timing Minimal retailer effort and cost Quick results Improve retailer performance

6. Types of Trade-Oriented Sales Promotions Trade allowances Point-of-purchase materials Cooperative advertising and vendor support programs Trade contests and incentives Trade shows Specialty advertising Training programs

7. Trade Allowances Types of trade allowances buying allowances promotional allowances slotting allowances Abuses forward buying diverting Alternatives to trade allowances EDLP pay-for performance

8. Point-of-Purchase Materials Types of p.o.p. permanent p.o.p. temporary p.o.p. in-store media Functions informing reminding encouraging merchandising Benefits both manufacturers and retailers best for brands with strong consumer franchises

9. Co-op Advertising Types (horizontal co-operative advertising) (ingredient-sponsored co-operative advertising) vertical co-operative advertising manufacturer programs retailer-initiated projects

10. Trade Contests and Incentives Types product or program sales new account placements merchandising efforts Potential conflicts

11. Objectives of Consumer-Oriented Sales Promotions Obtaining trial and repurchase Increasing consumption of an established brand Defending current customers Targeting a specific market segment Enhancing IMC and building brand equity

12. Consumer-Oriented Sales Promotion Techniques Samples Coupons Premiums Contests and sweepstakes Refunds and rebates Bonus packs Price-off deals

13. Samples Criteria low unit value divisible superior benefits short purchase cycle Methods door-to-door mail in-store on-package Internet

14. Coupons Oldest, most widely used Very effective Problems forecasting response used primarily by current users, not new users low redemption rates and high costs misredemption

15. Coupons (2) Methods of distribution FSI direct mail newspapers and magazines in/on pack regular cross-ruff instant in-store Internet

16. Premiums Trend is away from gimmicks to value-added Free premiums in/on pack mail in airline miles Self-liquidating premiums

17. Contests and Sweepstakes Increasingly popular Contest involve consumer with the brand Sweepstakes game scratch-off card Problems legal considerations ? contribution to CFB professional/hobbyist participation

18. Refunds and Rebates Generally high response, especially as size of savings increases Problems negative consumer perceptions

19. Sales Promotion Addiction Easier to offer an immediate price savings than to differentiate the brand loss in perceived value of the brand cherry-pickers Attribution theory Sales promotion trap

20. Sales Promotion Trap

21. Considerations in Developing a Sales Promotion Short term impact sales Long term effect on the brand brand franchise profitability Competitive reaction retaliatory promotions Quick fix?

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