Sales Promotion • Incentive offered to encourage buying a good or service. • Goal is to increase demand and stimulate sales
Sales Promotion • Can be directed towards manufacturers, wholesalers, retailers, consumers or a company’s employees. • May be either consumer oriented or trade oriented (business to business)
Consumer Sales Promotions • Designed to encourage customers to buy a product. • Include: Premiums, Incentives, Product Samples, Loyalty Marketing Programs, Promotional Tie-ins, Product Placement and visual merchandising and displays.
Consumer Sales Promotions • Premiums • Low cost items given to consumers at a discount or for free. They are designed to increase sales by building product loyalty and attracting new customers.
Consumer Sales Promotions • Four types of popular consumer premiums are coupons, factory packs, traffic builders and coupon plans.
Consumer Sales Promotions • Coupons • Certificates which entitle customers to cash discounts on goods or services. • Manufacturers use coupons to introduce new products, to enhance the sales of existing products and to encourage retailers to stock and display products
Consumer Sales Promotions • Factory Packs • Free gifts placed in product packages. Especially popular in cereal packages aimed at children.
Consumer Sales Promotions • Traffic Builders • Low-cost premiums, such as pens, key chains and calendars which are given away free to consumers for visiting a new store or attending a special event
Consumer Sales Promotions • Coupon Plans • Ongoing programs offering a variety of premiums in exchange for labels, coupons or other tokens from one or more purchases. • May involve special catalogs. Examples include Camel Cash, Soup Labels, Box tops, etc.
Consumer Sales Promotions • Incentives • Businesses use incentives to promote many products because they create customer excitement and increase sales.
Sweepstakes • Games of chance. One example is customers at fast food restaurants receiving a game card with or without a purchase. Their game card might earn them a small prize or a chance at bigger prize.
Rebates • Discounts offered by manufacturers to customers who purchase an item during a given time period.
Product Samples • Free trial size of a product sent through the mail, distributed door to door, or given away at retail stores and trade shows. Deteregents, toothpastes, shampoos and colognes are often promoted this way.
Product Placement • Strategic placement of an item in motion pictures or on television to increase or enhance the public’s knowledge about a particular product.
Product Placement • Products placed in movies or on television are often perceived by the audience to be chosen by the star, thus receiving an implied endorsement. • Products shown on screen within a film’s story line have higher credibility than products in advertisements which the audience knows are paid announcements
Product Placement • Placements are shown in the context of the show. They cannot be skipped over like print ads, ‘zapped’ by VCR users or ignored by viewers. • Producers desire brand name products in their productions to provide them with the ‘look’ of reality.
Product Placement • With advertising costs skyrocketing, product placement may provide a very cost effective means of reaching a broad audience. • May help to defray the cost of producing a movie or television program.
Product Placement • How much does it cost? • Your product or business might lend local color or fill a specific need-consider how Seinfeld turned small businesses such as Love Discount Stores, H&H Bagels, and Tom's Restaurant into stars.
Product Placement • "Over 90 percent of the time there is no fee," said Dean Ayers, president of the Entertainment & Marketing Resources Association. The goods run the gamut from Lemon Heads candy to corporate jets, but it's the stuff like cars and computers, which can save productions big money, that usually fly fee-free.
Promotional Tie-ins • Involve sales promotional arrangements between one or more retailers or manufacturers. They combine their resources to do a promotion that creates additional sales for each partner. Examples are Disney and McDonalds and Speilberg and Burger King.
Promotional Tie-ins • Tie-ins are designed to stimulate customer response to a product or products offered and combine the resources of each partner in the arrangement.
Trade Promotions • Sales promotion activities designed to gain manufacturers’, wholesalers’ and retailers’ support for a product. More money is actually spent on promoting to business than to consumers.
Trade Promotions • Slotting Allowances • Cash premium paid by the manufacturer to a retail chain for the costs involved in placing a new product on its shelves, including but not limited to, retailers’ discount specials, charges for store shelves, penalties for poor sales and store advertising and display costs.
Trade Promotions • Buying allowances • Price discount given by manufacturers to wholesalers and retailers to encourage the purchase of a product. Sometimes used to encourage buying a larger quantity of a product.
Trade Promotions • Trade shows and conventions • Designed to reach wholesalers and retailers. Provide businesses with opportunities to introduce new products, encourage increased sales of existing products and gain continued company an product support.
Trade Promotions • Sales incentives • Awards given to managers and employees who successfully meet or exceed a sales quota.