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Extra Credit Opportunity. Bring in coupons, discount flyers, free offers, etc. for extra credit. You can earn 1 point per promotion (must be in good condition). MAXIMUM OF FIVE PROMOTIONS. Quick Question. How have you been persuaded to buy merchandise ?

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extra credit opportunity
Extra Credit Opportunity

Bring in coupons, discount flyers, free offers, etc. for extra credit.

You can earn 1 point per promotion (must be in good condition).

MAXIMUM OF FIVE PROMOTIONS.

quick question
Quick Question

How have you been persuaded to buy merchandise?

How have you been informed about new products?

Brainstorm the types of promotions that you frequently encounter.

types of promotion
Types of Promotion

Section 17.2

objectives
Objectives
  • define sales promotion
  • explain the use of promotional tie-ins, trade sales promotions, and loyalty marketing programs
sales promotion
Sales Promotion

Sales promotions can be used to:

  • encourage customers to try a new product
  • build awareness
  • increase purchases by current customers
  • reward loyalty
trade promotions
Trade Promotions

More money is actually spent on promoting to businesses than to consumers.

trade promotions cont
Trade Promotions, Cont.

Good business ethics require that trade promotional payments and awards:

  • be offered in a uniform manner
  • terms be clearly spelled out
  • no one be penalized for not achieving the goals
major trade promotions include
Major Trade Promotions Include:
  • promotional allowances
  • cooperative advertising
  • slotting allowances
  • sales force promotions
  • trade shows and conventions
promotional allowances
Promotional Allowances
  • represent cash payments or discounts given by manufacturers to wholesalers or retailers for performing activities to encourage sales
  • example: price discount for stocking a large quantity of a product
cooperative advertising
Cooperative Advertising
  • manufacturer helps the retailer to pay the cost of advertising the product locally
slotting allowances
Slotting Allowances
  • cash premium paid by a manufacturer to help the retailer cover the costs of placing the product on the shelves
  • range from a few thousand to several million dollars per product
slotting allowances cont
Slotting Allowances, cont.
  • pay for space in store, discount specials, charges for store shelves, penalties for poor sales, advertising, display costs
sales force promotions
Sales Force Promotions
  • awards given to dealers and employees who successfully meet or exceed a sales quota
  • can be for a specified period of time
  • can include cash, bonuses, or prizes
trade shows and conventions
Trade Shows and Conventions
  • showcase a particular line of products
  • introduce new products
  • encourage increased sales of existing products
  • meet customers and partners
  • gain continued company and product support
consumer promotions
Consumer Promotions
  • promotional tie-ins
  • product placement
  • loyalty marketing programs
  • point-of-purchase displays
  • coupons
  • premium deals
  • deals
  • incentives
  • product samples
  • sponsorships
coupons
Coupons
  • used to introduce new products, enhance sales of existing products, and encourage retailers to stock and display both
  • found on packages, in magazines, or downloadable online
coupons cont
Coupons, Cont.
  • stores send coupons to manufacturers or clearinghouses to be reimbursed for the amount of the coupon
    • clearinghouses charge a handling fee
quick activity
Quick Activity

Read the promotion on page 371.

What is this rebate offer promoting?

premium deals
Premium Deals
  • increase sales by building product loyalty and attracting new customers
  • fundamental concept – people will be more motivated to buy a product when they are offered an added-value gift in exchange
premium deals cont
Premium Deals, Cont.
  • factory packs – free gifts placed in product packages
  • traffic builders – low-cost pens, key chains, calendars, coffee mugs given away at the store or event
premium deals cont1
Premium Deals, Cont.
  • coupon plans – offer a variety of premiums in exchange for product labels or coupons obtained from the product (send in labels and get a gift)
deals
Deals
  • offer short-term price reductions that are marked directly on the package
  • example: two products bound together for the price of one
incentives
Incentives
  • contests – activities that require the participant to demonstrate a skill
  • sweepstakes – games of chance
  • rebates – discounts offered by manufacturers during a given time period
quick activity1
Quick Activity

Turn to page 372.

Which two goals does this premium offer seek to accomplish?

What type of plan do you think this ad promotes – factory packs, traffic builders, or coupon plan?

product samples
Product Samples
  • can be sent through the mail, distributed door-to-door, or given away at retail stores and trade shows
  • especially important in promoting new products
sponsorships
Sponsorships
  • company pays a fee for the right to promote itself and its products at or on a set location
    • physical site: airport
    • event: concert
    • group: Nascar team
    • person: celebrity or athlete
sponsorships1
Sponsorships
  • title sponsor – an organization that pays to have its name incorporated into the name of the sponsored location
  • high-profile promotion
promotional tie ins
Promotional tie-Ins
  • partners combine their resources to conduct a promotion that will create additional sales for each partner
product placement
Product Placement
  • using a brand name product in a movie, TV show, sporting event, etc.
  • helps an organization develop recognition for its products and increase exposure
loyalty marketing programs
Loyalty marketing programs
  • frequent buyer/reward programs
    • frequent flyer programs, Panera rewards card
  • offer consumers incentives to continue to buy
loyalty marketing programs1
Loyalty Marketing Programs
  • online loyalty marketing – Yahoo! awards points to consumers who buy from certain retailers that can be turned into frequent flyer miles
quick activity2
Quick Activity

On page 373 – read “Net Marketing”.

With a partner, suggest how online grocers can promote online shopping and avoid high promotional costs.

quick activity3
Quick Activity

Turn to page 374.

Why are loyalty programs involving co-branded credit cards growing in popularity?

Would you change from one brand to another if the other one had co-branded with a company that you like?

point of purchase displays
Point-of-Purchase Displays
  • designed primarily by manufacturers to hold and display their products
  • placed in high traffic areas and promote impulse purchases
extra credit assignment
Extra Credit Assignment

Choose one of your coupons and create a small poster to explain the parts. Consider:

  • how you received it
  • what it entails
  • restrictions and expiration dates
  • locations
  • how the coupon contributes to the sale of the product