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Chapter 15. Sales Promotions. Sales Promotion.

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Chapter 15 l.jpg

Chapter 15

Sales Promotions


Sales promotion l.jpg
Sales Promotion

“Sales Promotion is a Marketing Discipline that Utilizes a Variety of Incentive Techniques to Structure Sales-Related Programs Targeted to Consumers, Trade, and/or Sales Levels that Generate a Specific, Measurable Action or Response for a Product or Service.”


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Reasons for the Growth of Sales Promotion

Assessment of Sales

Promotion is

Relatively Easy.

Sales Managers are Under

Great Pressure to

Produce Results

Quickly.

Why Are Companies

Spending More and More

Money on Sales

Promotion?

Cost for Results

In This Industry Are

Relatively Low.

Sales Promotion

Strategies Target

Consumer, Trade, and

The Sales Force.


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Promotion Can:

Offer an immediate inducement,

Cause customers to try a product,

Persuade customers to buy again,

Introduce a new product or build a brand over time.

Promotion Can’t:

Create an image for a brand,

Compensate for a lack of advertising,

Do much to compensate for a negative image,

Reverse a sales decline.

Promotion Strategies


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Sales Promotion Strategies

Objectives

Intended to

Change Consumer

Behavior

Building Brands

Can be Used to Build

Brand Images, But

May be Long-Term

Introducing

New Products

Advertising and Promotion

Work Well Together

Here Using

Push & Pull

Strategies


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Consumer-Oriented Promotions

Samples

Coupons

Consumer-

Oriented

Promotion

Premiums

Contests/sweepstakes

Refunds/rebates

Bonus packs

Price-offs

Event sponsorship


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Objectives of Consumer-Oriented Sales Promotion

  • Obtaining trial and repurchase

  • Increasing consumption of an established brand

  • Defending current customers

  • Targeting a specific market

  • Enhancing advertising and marketing efforts


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Advantages of Coupons

  • Offers price reduction only to consumers who are price sensitive

  • Does not rely on retailers’ cooperation

  • Generates trial of a new brand

  • Encourages non-users to try an established brand or users to repeat use


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Disadvantages of Coupons

  • Difficult to estimate redemption rates (<2%)

  • May be redeemed by loyal users who would buy anyway

  • Expensive

  • Misredemption and fraud


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Contests

Compete for a Prize Based

On Some Skill or Ability

Generates

High Degree

Of Consumer

Involvement

Can Help

Revive

Lagging

Sales

Contests and Sweepstakes

Sweepstakes

Participants Submit Names

To Be Included in Drawing

Game –

Type of Sweepstakes;

Time Frame Much

Longer


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Advantages of Sweepstakes and Contests

  • Effective way of getting the consumer to become involved with the brand by making the promotion product relevant

  • Generate interest in or excitement over a brand and attracting attention to advertising

  • Effective way of dealing with specific marketing problems


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Disadvantages of Contests and Sweepstakes

  • May overshadow the ad or brand

  • May detract from brand franchise or image

  • Legal problems and administration

  • Presence of professionals or hobbyists who may submit entries and detract from effectiveness


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Station Break

  • Go to the McDonald’s Web site at www.mcdonalds.com.

  • This site provides a variety of activities for visitors including contests and sweepstakes.

  • What is your view of contests or sweepstakes where children might be involved (notice that the Web site is oriented toward younger customers)?

  • What is the purpose of the contest or sweepstakes in this case?

  • Do they help sell the products? Discuss in class.


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Refunds and Rebates

A Marketer’s Offer to Return a Certain Amount Of Money to the Consumer Who Purchases the

Product. i.e cash rebate + low-value coupon

Premiums

Tangible Reward for Performing a Particular Act.

Direct – Received

At Time of Purchase

Mail – Proof of

Purchase & Payment

Be Mailed In

Refunds, Rebates, and Premiums


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Allowing the Customer to Experience the

Product or Service.

Very Effective Strategy for Introducing

A New or Modified Product.

Most Common Method of Distributing

Samples is Through the Mail.

9 Out of 10 Customers Prefer a Sample

To a Cents-Off Coupon to Introduce

Product.

Sampling


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Trade Promotions

  • Trade advertising is directed at wholesalers and retailers and represents 50% of the total promotional spending.

  • Four goals of a trade promotion are:

    • Stimulate in-store merchandising or other trade support,

    • Manipulate levels of inventory held by wholesalers and retailers,

    • Expand product distribution to new areas of the country or new classes of trade,

    • Create a high level of excitement about the product among those responsible for its sale.


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Types of Trade Promotions

Point-of-Purchase

Trade Deals

Retailer Kits

Trade Incentives

Contests

Exhibits

Sweepstakes

Trade Shows



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Objectives of Trade-Oriented Sales Promotions

  • Obtain distribution for new products

  • Maintain trade support for established brands

  • Encourage retailers to display established brands

  • Build retail inventories


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Display Distributed to Retailers Used to Call

Customer’s Attention to Product Promotions.

Some of the Most Popular POP Tools & Techniques

Carton Displays

Special Racks

Banners

Signs

Price Cards

Mechanical Product

Dispensers

Point-of-Purchase Displays

$12 Billion Business; Second Largest Category of Sales Promo Expenditures.


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Trade Promotions

Contests &

Sweepstakes

Retailer (Dealer) Kits

Materials That Help Reps Make Sales Calls Are Often Designed as Kits.

Contain Detailed Product Specs, How-to-Do it Display, etc.

Trade Shows

& Exhibits

Advertisers Can Develop Contests & Sweepstakes to Motivate Resellers.

Occasional Use Only is Effective.

Allow Product Demonstrations, Provide Information, & Answer Questions.

$16.5 Billion is Spent Annually.


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$8 to $12 Billion Business Annually Designed

for Special Trade Promotional Circumstances.

Trade Incentives and Deals

Incentive Programs

i.e. Used When Introducing

A New Product.

Types Include Bonuses &

Dealer Loadings

Trade Deals

Most Important Reseller Sales Promo Technique.

Types Include Buying & Advertising Allowances


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Sponsorships and Event Marketing

  • Sponsorships include a number of activities including:

    • sports sponsorships,

    • entertainment tours and attractions,

    • festivals,

    • fairs, and annual events,

    • cause marketing – associating with an event that supports a social cause, and

    • arts.


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Sponsorships and Event Marketing

  • Event marketing describes the marketing practice in which a brand is linked to an event to create experiences for customers and associate the brand personality with a certain lifestyle.

  • A sponsorship occurs when a company sponsors a sports event or concert, or supports a charity with its resources.

  • It is attempting to increase the perceived value of the sponsor’s brand in the consumer's mind.

  • Blimps, balloons, and inflatables are used at many events.


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Build Brands; Creating Both Awareness and Reminders

Specialty Advertising

Includes Everything From Hats With Logos to T-shirts, & Mousepads

Third Largest

Category of

Promotional

Spending

Normally Have a Promotional Message Printed Somewhere