Consumer and Trade Sales Promotion

8/9/2019 Consumer and Trade Sales Promotion

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C H A P T E RC H A P T E R

© 2007 The McGraw-Hill Companies, Inc. All rights reserve.McGraw-Hill!Irwin

Consumer and

Trade

Sales Promotion

18


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18-2 © 2007 The McGraw-Hill Companies, Inc. All rights reserve.Bearden Marketing 5 th Ed

Learning ObjectivesLearning Objectives

After studying this chapter, you should be able to: Explain the role and significance of sales promotion in the

marketing communications mix.

nderstand !hy sales promotion expenditures account for

a significant portion of many firms" marketingcommunications budgets.

#iscuss the ob$ecti%es and techni&ues of consumer salespromotion.

#iscuss the ob$ecti%es and techni&ues of trade sales

promotion. Explain the limitations of sales promotion.

'eali(e ho! decepti%e and fraudulent sales promotion%ictimi(es both consumers and marketers.


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18-) © 2007 The McGraw-Hill Companies, Inc. All rights reserve.Bearden Marketing 5 th Ed

McDonald’sMcDonald’s

*c#onald"s, long a leading user ofspecial promotions to attractconsumers to its stores, madeindustry headlines !ith its *onopolygame promotion in 2++.

*c#onald"s teamed !ith ildangent,a ma$or manufacturer of onlinegames, !hich produced online demogames modified to include *c#onald"sproduct placements.

*c#onald"s then used the games aspri(es in its *onopoly contest, andpromotion partner ildangentbenefited from the introduction of itsgames to millions of prospecti%e gamecustomers.


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18- © 2007 The McGraw-Hill Companies, Inc. All rights reserve.Bearden Marketing 5 th Ed

The Role of Sales PromotionThe Role of Sales Promotion

Consumer sales promotion is

directed at consumers.

Trade sales promotion is directed at

resellers.

/ales/ales

0romotion0romotion

onsists of media and nonmedia

marketing communications employed

for a predetermined, limited time to

stimulate trial, increase consumer

demand, or impro%e producta%ailability.


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18- © 2007 The McGraw-Hill Companies, Inc. All rights reserve.Bearden Marketing 5 th Ed

The SignificanceThe Significance

of of

Sales PromotionSales Promotion

onsumeronsumer3actors3actors

4mpact of4mpact ofechnologyechnology

/ales/ales0romotion0romotion

ExpendituresExpenditures

4ncreased 'etail4ncreased 'etail0o!er 0o!er

Sales PromotionSales Promotion


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18-5 © 2007 The McGraw-Hill Companies, Inc. All rights reserve.Bearden Marketing 5 th Ed

1 Commandments of Sale Promotion1 Commandments of Sale Promotion

1. Set specific objectives. ndisciplined, undirected creati%e!ork is a !aste of time and resources.

2. Kno ho basic promotion techni!ues or". As!eepstakes shouldn"t be used to encourage multiple

purchases or a refund to get ne! customers. A price-off dealcan"t re%erse a brand"s do!n!ard sales trend.

). #se simple$ attention%getting cop&. *ost promotions arebuilt around a simple idea: 6sa%e 7 cents. Emphasi(e theidea, and don"t try to be cute.

. #se contemporar&$ eas&%to%trac" graphics. #on"t expectto fit ++ !ords and 2+ illustrations into a &uarter-page,freestanding insert.

. Clearl& communicate the concept. ords and graphicsmust !ork together to get the message across.


7/2118-7 © 2007 The McGraw-Hill Companies, Inc. All rights reserve.Bearden Marketing 5 th Ed

1 Commandments of Sale Promotion1 Commandments of Sale Promotion

5. Reinforce the brand's advertising message. ie promotionsto the brand"s ad campaign.

7. Support the brand's positioning and image. his isespecially important for image-sensiti%e brands and categories,like family-oriented 9raft.

8. Coordinate promotional efforts ith other mar"etingplans. e sure to coordinate schedules and plans. A consumerpromotion should occur simultaneously !ith a trade promotion; afree-sample promotion should be timed in con$unction !ith theintroduction of a ne! line.



Consumer Sales PromotionConsumer Sales Promotion

>b$ecti%es of onsumer /ales 0romotion:

/timulate trial

4ncrease consumer in%entory and consumption

Encourage repurchase

?eutrali(e competitors

4ncrease sales of complementary products

/timulate impulse purchasing

Allo! flexible pricing


9/2118-< © 2007 The McGraw-Hill Companies, Inc. All rights reserve.Bearden Marketing 5 th Ed

ouponsoupons A coupon is typically a printed

certificate gi%ing the bearer a stated

price reduction or special %alue on a

specific product, generally for a

specific period.

0rice #eals0rice #eals A price deal is a temporary reduction

in the price of a product. here are

t!o primary types of price deals:

cents-off deals and price-pack deals.

more

Consumer Sales Promotion Techni!uesConsumer Sales Promotion Techni!ues


10/2118-1+ © 2007 The McGraw-Hill Companies, Inc. All rights reserve.Bearden Marketing 5 th Ed

ross-ross-

0romotions0romotions

A cross%promotion @tie-in), is the

collaboration of t!o or more firms in

a sales promotion. rosspromotionsenhance the communications effort

of all the participating firms.

'ebates'ebates A rebate is a cash reimbursement to

a buyer for purchasing a product.

he consumer must mail a rebate

form, the purchase receipt, and proof

of purchase to the manufacturer.

more




0remiums0remiums An item gi%en free or at a bargain

price to encourage the consumer to

buy is called a premium.

ontests,ontests,

amesames

A contest offers pri(es based on the

skill of contestants. A seepsta"es

offers pri(es based on a chance

dra!ing of participants" names.

)ames are similar to s!eepstakes,

but they co%er a longer period.

more




/ampling/ampling A sample is a small si(e of a

product made a%ailable to

prospecti%e purchasers, usually free

of charge.


Ad%ertising Ad%ertising

/pecialities/pecialities

An advertising specialt&$ also

called a promotional product, is an

item of useful or interesting

merchandise gi%en a!ay free ofcharge and typically carrying an

imprinted name or message.


13/2118-1) © 2007 The McGraw-Hill Companies, Inc. All rights reserve.Bearden Marketing 5 th Ed

Trade Sales PromotionTrade Sales Promotion

>b$ecti%es of rade /ales 0romotion:

ainBmaintain distribution

4nfluence resellers to promote product

4nfluence resellers to offer price discount

4ncrease reseller in%entory

#efend against competitors

A%oid reduction of normal prices



#ealer#ealer

CoadersCoaders

A dealer loader is a premium gi%en

to a reseller to encouragede%elopment of a special display or

product offering.

raderade

Allo!ances Allo!ances

Trade alloances are short-term

special allo!ances, discounts, or

deals granted to resellers as an

incenti%e to stock, feature, or in some

!ay participate in the cooperati%epromotion of a product.

more

Trade Sales Promotion Techni!uesTrade Sales Promotion Techni!ues



0oint-of-0oint-of-

0urchase0urchase

#isplay#isplay

Point%of%purchase displa&s are

generally used at the retail le%el to

call customer attention to a featuredproduct.

raderade

ontestsontests

A trade contest typically associates

pri(es !ith sales of the sponsor"s

product. rade contests generate

interest, !hich makes them useful for

moti%ating resellers.

more




rade /ho!srade /ho!s A trade sho is a periodic, semi-

public e%ent at !hich suppliers rent

booths to display products and

pro%ide information to potential

buyers.


rainingraining

0rograms0rograms

/ome manufacturers sponsor or pay

for training programs for customer

employees.

more



0ush *oney0ush *oneyPush mone&$ also called spiffs @for

special promotional products

incenti%e fundsD, is !hat a

manufacturer pays retail sales-

people to encourage them to promoteits products o%er competiti%e brands.




Limitations of Sales PromotionsLimitations of Sales Promotions

1. 4t typically cannot re%erse a genuine declining sales

trend.

2. *arketers cannot reasonably expect sales promotion

to con%ert re$ection of an inferior product intoacceptance.

). /ales promotion may e%en !eaken the brand image.

. /ales promotion has also been blamed forencouraging competiti%e retaliation.

. /hort-term %olume gain at the sacrifice of profits.


19/2118-1< © 2007 The McGraw-Hill Companies, Inc. All rights reserve.Bearden Marketing 5 th Ed

/tuffing the/tuffing the

allot oxallot ox

A retailer legitimately obtains cash from

clearinghouses and manufacturers for

coupons handed in by shoppers, butboosts the take illegally by sending in extra

coupons purchased at steep discounts

from %arious sources.

3ake3ake

/torefront/torefront

A scam artist rents space cheap, sets up a

store, then starts sending in coupons to

manufacturers for payment. /oon the

store"s shel%es are bare, but the 6o!ner is

still sending in coupons obtained illegally.

more

"thical and Legal #ssues"thical and Legal #ssues


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'edemption'edemption

/cam/cam

*anufacturers offer big cash rebates on

large items to shoppers !ho mail in forms,

together !ith proofs of purchasereceipts, labels, or box tops. A con artist

uses the rebate forms and proofs

of purchase, real or counterfeit, to illicitly

collect refunds !ithout buying products.

0laying the0laying the

*iddleman*iddleman

An ambitious operator makes money

supplying other operatorscollecting

coupons by the pound and selling them to

retailers, buying and selling proofs of

purchase, or counterfeiting coupons andproofs of purchase.

"thical and Legal #ssues"thical and Legal #ssues


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18 21 © 2007 The McGraw Hill Companies Inc All rights reserveBearden Marketing 5th Ed

Summar$ Summar$

After studying this chapter, you should be able to: Explain the role and significance of sales promotion in the

marketing communications mix.

nderstand !hy sales promotion expenditures account for a

significant portion of many firms" marketing communicationsbudgets.

#iscuss the ob$ecti%es and techni&ues of consumer salespromotion.

#iscuss the ob$ecti%es and techni&ues of trade sales

promotion. Explain the limitations of sales promotion.

'eali(e ho! decepti%e and fraudulent sales promotion%ictimi(es both consumers and marketers.

Documents

Consumer and Trade Sales Promotion