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Promotional Mix Promotional Mix Strategies Strategies Push versus Pull Push versus Pull and More and More

Push Pull 08102005

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Page 1: Push Pull 08102005

Promotional MixPromotional Mix Strategies Strategies

Push versus Pull Push versus Pull and Moreand More

Page 2: Push Pull 08102005

To gain To gain trialtrial among nonusers of a brand/service. among nonusers of a brand/service. To increase To increase repeat purchaserepeat purchase and/or multiple and/or multiple

purchases. purchases. To expand brand usage by suggesting To expand brand usage by suggesting new new

usesuses.. To defend share against To defend share against competitioncompetition.. To To supportsupport advertising campaign, theme, image. advertising campaign, theme, image. To To increase distributionincrease distribution and/or dealer, retailer and/or dealer, retailer

cooperation.cooperation. Short-term vs. long-term goals and relationships.Short-term vs. long-term goals and relationships.

Sales Promotion:Sales Promotion:

Page 3: Push Pull 08102005

Sales Promotion:Sales Promotion:

Creating an immediate sale is Creating an immediate sale is the primary objective. the primary objective.

Extra incentives to enhance movement Extra incentives to enhance movement and sales. Helps the selling process. and sales. Helps the selling process.

Direct inducement that offers an extra Direct inducement that offers an extra value or incentive to sales force, value or incentive to sales force, distributors or the ultimate consumer.distributors or the ultimate consumer.

Stimulates Dealer and Channel Involvement.Stimulates Dealer and Channel Involvement.

Page 4: Push Pull 08102005

Sales Promotion:Sales Promotion:

Increasingly, the gimmicks are Increasingly, the gimmicks are going away. More scanning data. going away. More scanning data.

Step up to the challenge of real, brand building Step up to the challenge of real, brand building value, the kind that sparks genuine consumer value, the kind that sparks genuine consumer and retailer interest.and retailer interest.

Contribute to marketing goals.Contribute to marketing goals. More Events and Product Licensing More Events and Product Licensing

Page 5: Push Pull 08102005

InfluencesInfluences

Push StrategyPush Strategy calls for using the calls for using the sales force and trade sales force and trade promotion.promotion.

Pull StrategyPull Strategy calls for spending on calls for spending on advertising and sales advertising and sales promotion to build promotion to build consumer demand.consumer demand.

Page 6: Push Pull 08102005

Push Strategy:Push Strategy:

Persuade wholesalers and retailers to carry Persuade wholesalers and retailers to carry brands.brands.

Give a brand shelf space.Give a brand shelf space. Promote a brand in coop advertising.Promote a brand in coop advertising.

Producer Wholesaler Retailer Customer

Page 7: Push Pull 08102005

Push Strategy:Push Strategy: Be careful of those big displays at the end of the Be careful of those big displays at the end of the

aisles. aisles. End Aisle Displays. End Caps.End Aisle Displays. End Caps. Look at the prices. Look at the prices. Only about 40% is Only about 40% is

actually on sale.actually on sale. Because they are so bright, big and visual, we Because they are so bright, big and visual, we

feel it’s on sale. feel it’s on sale.

Producer Wholesaler Retailer Customer

Page 8: Push Pull 08102005

Pull Strategy:Pull Strategy:

Entice customers to try a new product.Entice customers to try a new product. Lure customers from competitive products.Lure customers from competitive products. Hold and reward loyal customers.Hold and reward loyal customers.

Producer Wholesaler Retailer Customer

Page 9: Push Pull 08102005

Push Tools:Push Tools:

Deals- Allowances, Price-offs and DiscountsDeals- Allowances, Price-offs and Discounts Displays and Point of Purchase Displays and Point of Purchase Dealer PremiumsDealer Premiums Samples and Free GoodsSamples and Free Goods Buy-Back GuaranteesBuy-Back Guarantees Cooperative AdvertisingCooperative Advertising Advertising MaterialsAdvertising Materials Push Money (Spiffs)Push Money (Spiffs) Dealer Meetings and Contests Dealer Meetings and Contests Specialty Advertising ItemsSpecialty Advertising Items

Page 10: Push Pull 08102005
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Pull Tools:Pull Tools:

Sampling---in-store, events, newspaper, in-packSampling---in-store, events, newspaper, in-pack Cents Off Promotions and Coupons (-2%)Cents Off Promotions and Coupons (-2%) Continuity/Frequency and Loyalty ProgramsContinuity/Frequency and Loyalty Programs PremiumsPremiums SLO (Self-Liquidating Offers/Premiums)SLO (Self-Liquidating Offers/Premiums) Point of Purchase DisplaysPoint of Purchase Displays Contests, Games and SweepstakesContests, Games and Sweepstakes Rebates and Cash refundsRebates and Cash refunds FSI’s (Free-Standing Inserts) FSI’s (Free-Standing Inserts) 80% of distribution80% of distribution Advertising Specialty ItemsAdvertising Specialty Items

Page 12: Push Pull 08102005
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Hints and Comments:Hints and Comments: Coupons getting clipped. Growing retailer Coupons getting clipped. Growing retailer

power and new accounting rules make power and new accounting rules make couponing couponing lessless attractiveattractive. .

20022002 Package-Goods Marketing Budgets Package-Goods Marketing Budgets 24%: Advertising 24%: Advertising

15%: Coupons and Customer Promotion15%: Coupons and Customer Promotion+61%+61%: Retail-Trade Promotion: Retail-Trade Promotion

100%100%

1997: 23% Advertising (same)1997: 23% Advertising (same) 24% Coupons/Cust. Promotion24% Coupons/Cust. Promotion 53% Retail-Trade Promotion53% Retail-Trade Promotion

Page 14: Push Pull 08102005

Hints and Comments:Hints and Comments:

850 FSI’s (free standing inserts) 850 FSI’s (free standing inserts) per person in ’04.per person in ’04.

251 BILLION coupons. 251 BILLION coupons. FSI’s are FSI’s are the vehicle in distributing the the vehicle in distributing the majority of coupons. Total pages majority of coupons. Total pages increased 5.9 percent in ’05. increased 5.9 percent in ’05.

Average coupon face values grew Average coupon face values grew 6.7%, to $1.09. 6.7%, to $1.09.

Offer duration increased to 10.6 Offer duration increased to 10.6 weeks. weeks.

Now more Household, and Heath Now more Household, and Heath & Beauty aids& Beauty aids

Page 15: Push Pull 08102005

Hints and Comments:Hints and Comments: The average face value of Free The average face value of Free

Standing Inserts (FSI’s) Standing Inserts (FSI’s) hit $1.03hit $1.03, , in comparison to $.95 in 2003, in comparison to $.95 in 2003, representing an 8.1% increase. In representing an 8.1% increase. In 2004 face value reached 2004 face value reached $1.00 mark$1.00 mark for the first time. for the first time.

We are seeing more manufacturers We are seeing more manufacturers present greater incentives to present greater incentives to shoppers, whether on a face value or shoppers, whether on a face value or per-unit basis. per-unit basis.

Marketers continue to validate that Marketers continue to validate that FSI’s are a great tool to build FSI’s are a great tool to build awareness and gain trial.” awareness and gain trial.” Marx Promotion Intelligence ‘04 FSI TrendsMarx Promotion Intelligence ‘04 FSI Trends

Page 16: Push Pull 08102005

Hints and Comments:Hints and Comments: Coupons can be delivered with a Coupons can be delivered with a

full page of advertising. i.e., full page of advertising. i.e., RestaurantsRestaurants

Coupons on new items but also Coupons on new items but also on products that have on products that have plateaued. To keep prices low plateaued. To keep prices low and keep products on shelf. and keep products on shelf.

$30 savings for a diabetic $30 savings for a diabetic testing kit or 25 cents off flour. testing kit or 25 cents off flour.

Demographics: 43% men; 32% Demographics: 43% men; 32% live with income of $40-75K.live with income of $40-75K.

Page 17: Push Pull 08102005

Hints and Comments:Hints and Comments: Coupon experts inspire more Coupon experts inspire more

use.use. Coupon savvy shoppers are advising Coupon savvy shoppers are advising other consumers to learn sale other consumers to learn sale cycles and buy items on sale to cycles and buy items on sale to save the most money. Although save the most money. Although coupon fraud exists, manufacturers coupon fraud exists, manufacturers offer coupons to entice trying a offer coupons to entice trying a new product or switch brands. new product or switch brands.

Big increases: Big increases: Vitamins, Rug and Vitamins, Rug and Room Deodorizers; Prepared and Room Deodorizers; Prepared and Frozen Foods; Hair Care; Cereals. Frozen Foods; Hair Care; Cereals. DecreasesDecreases in Household cleaning in Household cleaning products.products.

Page 18: Push Pull 08102005

Hints and Comments:Hints and Comments:

Walgreens and 15 top package-Walgreens and 15 top package-goods marketers are rolling out a goods marketers are rolling out a RFID system to electronically track RFID system to electronically track when, how long, and where when, how long, and where promotional displays are placed in promotional displays are placed in the chain’s 5,000+ stores. 1/06the chain’s 5,000+ stores. 1/06

Page 19: Push Pull 08102005

Hints and Comments:Hints and Comments: Slotting Allowances: The fees Slotting Allowances: The fees

retailers collect from retailers collect from manufacturers to ensure shelf manufacturers to ensure shelf space for new products make the space for new products make the marketplace more efficient, a marketplace more efficient, a Yale/Cornell study found. Yale/Cornell study found.

"We find that when retailers "We find that when retailers perceive that a product is likely to perceive that a product is likely to be a sure hit, they don't seem to be a sure hit, they don't seem to ask for slotting allowances ... ask for slotting allowances ... manufacturers don't offer slotting manufacturers don't offer slotting allowances when they perceive the allowances when they perceive the product to be a sure dud.”product to be a sure dud.”

ProgressiveProgressive Grocer Grocer (4/05)(4/05)

Page 20: Push Pull 08102005

Questions:Questions:

Are distributing drug samples Are distributing drug samples to doctors a push or a pull to doctors a push or a pull strategy?strategy?

Incentives from HBO to hotels Incentives from HBO to hotels and motels. Push or Pull?and motels. Push or Pull?

Beer.com produced 50K bottle Beer.com produced 50K bottle caps featuring its name and left caps featuring its name and left them on bars during spring and them on bars during spring and winter breaks. Push or Pull?winter breaks. Push or Pull?

Page 21: Push Pull 08102005

Question:Question:Wal-Mart TV network (in store) Wal-Mart TV network (in store) 42” plasma screens42” plasma screens A smart buy or a goodwill, A smart buy or a goodwill,

defensive gesture?defensive gesture? Sets are silent. Sets are silent. In-store advertising system. In-store advertising system. In fall ’06, $247K, 129 million In fall ’06, $247K, 129 million

impressions and CPM: $2.28 impressions and CPM: $2.28 includes three :30’s, and includes three :30’s, and five :10’s, every two hours.five :10’s, every two hours.

AdvAge 9/06AdvAge 9/06

Page 22: Push Pull 08102005

Sales promotion budgets are usually Sales promotion budgets are usually divided into three categories: divided into three categories:

1. Consumer advertising1. Consumer advertising

2. Consumer promotion2. Consumer promotion

3. Trade promotion3. Trade promotion

Companies in same industry can put Companies in same industry can put emphasis on emphasis on Push or PullPush or Pull. .

Summary:Summary:

Page 23: Push Pull 08102005

Push strategyPush strategy is appropriate with is appropriate with low brand awarenesslow brand awareness in a category in a category and brand choice is made in and brand choice is made in storestore. . Can be an impulse purchase and Can be an impulse purchase and product benefits are understood. product benefits are understood.

Pull strategyPull strategy works best with works best with high high brand awarenessbrand awareness and loyalty, or high and loyalty, or high involvement in category and involvement in category and customers customers look for product look for product differencesdifferences. .

Summary:Summary:

Page 24: Push Pull 08102005

Promotional MixPromotional Mix Strategies Strategies

Push versus Pull Push versus Pull and Moreand More

Page 25: Push Pull 08102005

Hints and Comments:Hints and Comments: Wal-Mart Touts In-Store TV Wal-Mart Touts In-Store TV

Research claims advertising on its Research claims advertising on its in-store marketing network, with in-store marketing network, with Premier Retail Networks, is more Premier Retail Networks, is more efficient than Cable and Network TV efficient than Cable and Network TV advertising in generating sales. A advertising in generating sales. A survey of TV watchers conducted by survey of TV watchers conducted by the TNS Media & Entertainment the TNS Media & Entertainment Group found that 15% of viewers Group found that 15% of viewers purchased advertised products purchased advertised products immediately after seeing them on immediately after seeing them on an in-store broadcast.an in-store broadcast.    

MediaPostMediaPost Communications Communications 11/30/05 11/30/05