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Sales Promotion © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Sales Promotion © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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Text of Sales Promotion © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

  • Sales Promotion 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

  • An extra incentive to buyA tool to speed up sales1. Defining Sales Promotion 2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinA direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating an immediate sale.

  • CompetitionIncreased accountabilityShort-term focus of marketersFragmentation of consumer marketsBrand proliferationIncreased promotional sensitivityDeclining brand loyaltyGrowing power of retailers2. Reasons for Increase in Sales Promotion 2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinReasons

  • 3. Sales Promotion Vehicles 2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinConsumer-OrientedTrade-Oriented

  • SamplesCouponsPremiumsContests/sweepstakesRefunds/rebatesBonus PacksPrice-off dealsFrequency programs3. Sales Promotion Vehicles 2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinConsumer-OrientedEvent marketing

  • Objectives of Consumer-Oriented Sales Promotion 2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinObjectives

  • The products are of relatively low unit value, so samples dont cost muchThe products are divisible and can be broken into small sizes that can reflect the products features and benefitsSampling 2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSampling Works Best When

  • Event samplingWith newspaper/magazineCo-op package distributionCross-product samplingIn-store samplingCentral location distributionDirect mailDoor-to-doorSampling Methods 2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinMethods

  • Free Premiums: Only require purchase of the productPremium: an offer of an item of merchandise or service either free or at a low cost that is an extra incentive for customersPremiums 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

  • Contests and Sweepstakes 2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinContest: a promotion where consumers compete for prizes or money on the basis of skills or ability. Winners are determined by judging entries or ascertaining which entry comes closes to some predetermined criteriaSweepstakes/games: a promotion where winners are determined purely by chance and cannot require a proof of purchase as a condition for entry. Winners are chosen by random selection from a pool of entries or generation of a number to match those held by game entrants.

  • Summary of Consumer-Oriented Promotions and Market Objectives 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

  • Trade ShowsContests and IncentivesTrade AllowancesPoint-of-Purchase DisplaysSales Training ProgramsCooperative AdvertisingTypes of Trade-Oriented Promotions 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

  • Trade-Oriented Sales Promotion Objectives 2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinObjectives

    *Chapter SixteenSales Promotion 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin*Relation to textThis slide relates to material on pp. 495 of the text and provides a definition of sales promotion.Summary OverviewSales promotion is an inducement or incentive to the sales force, distributors, or ultimate customer with the primary objective of creating immediate sales. There are three important aspects of sales promotion:Extra incentive to buy coupons, rebates, premium provide extra reason to buyTool to speed up sales acceleration tool designed to shorten the purchase cycleTargeted to different parties can be targeted to consumers or to the tradeUse of this slideThis slide can be used to introduce sales promotion and its role in the overall IMC program. Attention should be given to these three important aspects of sales promotion. *Relation to textThis slide relates to material on pp. 497-501 of the text.Summary OverviewThis slide summarizes the reasons for the growth in sales promotion. These are:Growing power of retailers manufacturers used to have most of the power, now retailers through technology, consolidation, and private labeling have more powerDeclining brand loyalty consumers are purchasing more on the basis of price and valueIncreased promotional sensitivity consumers want to save money and respond well to promotions that provide them the opportunity to do soBrand proliferation many new brands that offer little differentiationFragmentation of consumer markets traditional mass media advertising has become less effective and promotions are a way to reach market segmentsShort-term focus of marketers sales promotion is seen as a way of generating an immediate increase in salesIncreased accountability pressure on managers to produce sales resultsCompetition the use of promotions is seen as way to gain a competitive advantageClutter promotional offers can breakthrough and attract attentionUse of this slideThis slide can be used to discuss the reasons for the increase in the use of sales promotion and the associated shift away from mass media advertising. In addition to the factors mentioned above another reason for the increase in spending is that the promotion industry has become more sophisticated and plays a more strategic role in the IMC program of many companies. *Relation to textThis slide relates to material on pp. 495-496 and Figure 16-1 of the text.Summary OverviewSales promotion can be broken into two major categories, consumer-oriented promotion and trade-oriented promotion. This slide shows the various types of activities of each.Consumer-orientedSamplesCouponsPremiumsContests/sweepstakesRefunds/rebatesBonus packsPrice-off dealsFrequency programsEvent marketingTrade-orientedContests, dealer incentivesTrade allowancesPoint-of-purchase displaysTraining programsTrade showsCooperative advertisingUse of this slideThis slide can be used to show the various tools that can be used for consumer and trade-oriented promotions. Consumer-oriented promotions are generally used as part of a push channel strategy while trade-oriented promotions are part of a pull strategy. *Relation to textThis slide relates to material on pp. 495-496 and Figure 16-1 of the text.Summary OverviewSales promotion can be broken into two major categories, consumer-oriented promotion and trade-oriented promotion. This slide shows the various types of activities of each.Consumer-orientedSamplesCouponsPremiumsContests/sweepstakesRefunds/rebatesBonus packsPrice-off dealsFrequency programsEvent marketingTrade-orientedContests, dealer incentivesTrade allowancesPoint-of-purchase displaysTraining programsTrade showsCooperative advertisingUse of this slideThis slide can be used to show the various tools that can be used for consumer and trade-oriented promotions. Consumer-oriented promotions are generally used as part of a push channel strategy while trade-oriented promotions are part of a pull strategy. *Relation to textThis slide relates to material on pp. 503-507 of the text.Summary OverviewThis slide outlines some of the objectives of consumer-oriented sales promotion programs. These objectives include:To obtain trial and purchaseTo increase consumption of an established brandTo defend (maintain) current customersTo target a specific segmentEnhance IMC efforts and build brand equityUse of this slideThis slide can be used to discuss the various objectives marketers have in using consumer-oriented sales promotions and what companies hope to accomplish by using them. While the basic goal of most consumer-oriented sales promotion programs is to induce purchase, these other objectives for both new and established brands should be considered. *Relation to textThis slide relates to material on pp. 507-509 of the text.Summary OverviewSampling involves giving the consumer some quantity of the product at no charge to induce trial. This slide outlines three criteria for an effective sampling program.These include:The products are relatively low unit value, so samples do not cost muchThe products are divisible and can be broken into small sizes that can reflect the products features and benefitsThe purchase cycle is relatively short so the consumer can purchase in relatively short time periodUse of this slideThis slide can be used to discuss sampling as a sales promotion technique. Manufacturers of packaged-goods products such as food, health care items, cosmetics, and toiletries, are heavy users of sampling since their products meet the three criteria for an effective sampling program. As a sales promotion technique, sampling is commonly used to introduce a new product or brand to the market. *Relation to textThis slide relates to material on pp. 509-510 of the text.Summary OverviewA basic decision of the brand or sales promotion manager is how the sample will be distributed. This slide lists the various options available for distributing samples to consumers. These include:Door-to-door Direct mailCentral location distributionIn-store samplingCross-product samplingCo-op package distributionWith newspaper/magazineEvent samplingInternet sitesUse of this slideThis slide can be used to discuss the various ways samples can be distributed to the consumer. The sampling method is important for two reasons: 1) the cost of the distribution, and 2) because the method can control the type of consumer who receives the sample. As such, the distribution method should be considered carefully when deciding on a sampling program. *Relation to textThis slide relates to material on pp. 516-517 of the text, which discusses premiums.Summary OverviewThis slide defines premiums which are an offer of an item of merchandise or service either free or at a low cost that is an extra incentive for customers. There are two basic types of premiums:Free premiums small gifts or merchandise included in the product packageSelf-liquidating premiums require customer to pay for some or all of the cost of the premiumUse of this slideThis slide can be used to introduce premiums as a sales promotion tool. Packaged carried premiums have high impulse value and can provide an extra incentive to buy the product. Free premiums have become very popular in the fast food restaurant industry as companies such as McDonalds and Burger King use premiums in their kids meals to attract children. Self-liquidating premiums are designed to not necessarily make money, but rather to cover costs and offer value to the consumer. *Relation to textThis slide relates to material on pp. 518-519 of the text.Summary OverviewContests and sweepstakes are an increasingly popular consumer-oriented promotion. There are differences between contests and sweepstakes as stated.Contest consumers compete for prizes or money on the basis of skill or ability, proof of purchase is generally required to enter or an entry form must be usedSweepstake winners are determined purely by chance and no proof of purchase is required to enterUse of this slideThis slide can be used to discuss the use of contests and sweepstakes. They are increasing in popularity as these promotions have appeal and glamour that other sales promotion tools such as cents-off coupons lack. Marketers like these type of promotions because they are perceived to be exciting and attract large numbers of consumers. *Relation to textThis slide relates to material on pp. 524-525 and Figure 16-5 of the text.Summary OverviewThis slide outlines which sales promotion tools can be used to accomplish various objectives of marketers and identifies whether the extra incentive or reward is immediate or delayed.Use of this slideThis slide can be used to discuss the use of consumer-oriented sales promotion tools for achieving various marketing objectives. Note that some of the sales promotion techniques are listed more than once because they can be used to accomplish more than one objective.*Relation to textThis slide relates to material on pp. 527-533 of the text.Summary OverviewManufacturers use a variety of trade promotion tools as inducements for wholesalers and retailers. These promotions include:Contests and incentives can be directed toward managers and/or employees at the wholesale or retail levelTrade allowances discount or deal to stock, promote or display manufacturers productBuying allowances price reduction during a fixed periodPromotional allowances discounts for promotional activitiesSlotting allowances retailers charge fees for a slot or position on shelfPoint-of-purchase displays various in-store displays used to sell productsSales training programs assisting in sales training programs for reseller personnelTrade shows forum where manufacturers can display productsCooperative advertising cost of advertising is shared by more than one intermediaryUse of this slide This slide can be used to discuss the various types of trade promotions. Many of these are often used to encourage the various marketing intermediaries to assist the manufacturer in the sale of product. *Relation to textThis slide relates to material on pp. 525-527 of the text that discusses trade promotion.Summary OverviewTrade-oriented sales promotion is targeted to marketing intermediaries such as wholesalers and retailers. There are several reasons promotions are targeted to the trade, which include:Obtain distribution of new productMaintain trade support for existing productsEncourage retailers to display existing brandsBuild retail inventoriesUse of this slideThis slide can be used to introduce trade-oriented sales promotion. Like consumer oriented sales promotion, sales promotion programs targeted to the trade should be based on well-defined objectives and measurable goals and a consideration of what the marketer wants to accomplish.