Sales Promotion

Sales Promotion

A direct inducement that offers

an extra value or incentive for
the product to the sales force,
distributors, or ultimate consumer
with the primary objective of
creating an immediate sale

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 Sales Promotion Vehicles
Consumer-Oriented Trade-Oriented
Samples Contests, incentives

Coupons Trade allowances

Premiums POP displays

Contests/sweepstakes Sales training programs

Refunds/rebates Trade shows

Bonus Packs Cooperative advertising

Price-off deals

Frequency programs

Event marketing
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Reasons for Sales Promotion Increases

Growing power of retailers

Declining brand loyalty
Increased promotional sensitivity
Brand proliferation
Fragmented consumer markets
Short-term focus of marketers
Increased accountability
Competition
Clutter
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 Sale Promotion Concerns

• Negative impact of sales promotions

• Fewer dollars to build brand equity
• Encourages consumers to purchase on the
basis of price
• Detracts from the value of the brand
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Objectives of Consumer-Oriented Promotions

Increase
consumption of an
established brand

Obtain trial Defend (maintain)

and purchase current customers

Enhance IMC
Target a
efforts and build
specific segment
brand equity

16-6
 Sampling

Sampling Works Best When

The product
can be broken
The products into a small The purchase
are of piece or size cycle is
relatively low that reflects relatively
unit value the full short
features and
benefits

16-7
 Pros and Cons of Coupons

Advantages Disadvantages
Appeals to price Hard to tell how many
sensitive consumers consumers will use
them and when
Can offer discounts
without retailer Often used by loyal
cooperation consumers who would
purchase anyway
Effective way to induce
trial of products Low redemption rates
and high costs
Defends market share
and encourages Misredemption
repurchase and fraud
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 Types of Coupons

In/On-Pack In-Store

Bounce-back Tear-off pads

Cross-ruff Handouts

Instant Dispensers

Register printout

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 Premiums

An offer of an item, merchandise, or

service, free or at a low cost, that is
an extra incentive for customers

Types of Premiums

Self-liquidating:
Free:
consumer required to
Only requires purchase
pay some or all of the
of the product
cost of the premium

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More Consumer-Oriented Promotions

Price-off Deals

Contests and
sweepstakes

Refunds and
rebates

Bonus packs

Loyalty programs

Event marketing

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 Trade Oriented Promotions

Obtain distribution for new

products
Objectives
Maintain support for
established brands

Encourage display of
products

Build retail inventories

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Types of Trade Oriented Promotions

Contests and incentives

Co-op Advertising
Types
Trade allowances

POP displays Buying

Sales training Promotional

Trade shows
Slotting

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 Cooperative Advertising

• Trade-oriented cooperative advertising

• The cost of advertising is shared by more
than one party
• Forms
• Horizontal
• Ingredient-sponsored
• Vertical

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The Sales Promotion Trap

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Direct Marketing
 Direct Marketing Defined

…an interactive system of marketing which

uses one or more advertising media to effect
a measurable response and/or transaction
at any location

Print
Interactive TV

Telemarketing Direct Mail

The Internet Other Media

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 Growth of Direct Marketing

Miscellaneous Consumer
Catalogs
factors Credit Cards

Changing Changing
Technological
Structure of Structure of
Advances
Markets Society

14-18
Direct Marketing Combines With…

Public
Public
Advertising
Advertising Relations
Relations

Direct
Direct
Marketing
Marketing
Support
Support Personal
Personal
Media
Media Selling
Selling
Sales
Sales
Promotions
Promotions

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How Database Marketing Works

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Objectives of Database Marketing

Improve Selection of
Market Segments

Stimulate Repeat
Purchases

Objectives
Objectives Cross-selling Other
Products

Customer Relationship
Management

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 Developing a Database

List
List Brokers
Brokers

Experion
Experion Standard
Simmons Standard Rate
Rate &&
Simmons Market
Market Data
Data Service
Service
Research
Research Bureau
Bureau
Sources
Sources
U.S.
U.S. Census
Census U.S.
U.S. Postal
Postal
Bureau
Bureau Service
Service

Direct
Direct Marketing
Marketing
Association
Association

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 Effective Databases

RFM
RFM Scoring
Scoring

Monetary
Monetary
Recency
Recency transactions
transactions

Frequency
Frequency

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 Direct Marketing Strategies

One-Step
One-Step Two-Step
Two-Step

• The medium is used • May use one medium

directly to obtain an to obtain inquiry and
order qualify prospect
• Often uses toll-free • Follow-up with a
phone orders and second medium to
credit card payments complete the sale

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 Porsche Targets Prospects

• Target Criteria
• Physicians in specialties
• Highest income levels
• Demographics of Porsche buyers
• Specific geographic areas
• Hooks
• Use X-ray of a Porsche 911 Carrera 4
• Use medical terminology

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Direct-Response versus Support Ads

Direct- Product/service offered

response
Sales response solicited
advertising
Toll-free numbers included
TV spots, infomercials,
home shopping shows

Reader’s Digest asks you to watch

Support mailbox for sweepstakes entry
advertising
Supports other advertising

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 Telemarketing

Used by Supports Big industry,

for-profit & one- and but
charitable two-step decreasing
organizations marketing sales

Potential for Impacted by

Annoys
fraud and Do Not Call
consumers
deception lists

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Forms of Direct Selling

Repetitive
person-to-person

Nonrepetitive
person-to-person

Party Plans

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Direct Marketing Advantages

Selective reach
Segmentation
Frequency potential

Testing
Timing
Personalization

Costs
Measures of effectiveness

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Direct Marketing Disadvantages

Accuracy
Accuracy

Image
Image Content
Content
factors
factors support
support

Do
Do Not
Not Rising
Rising
Contact
Contact lists
lists costs
costs

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Public Relations and Publicity
 Public Relations Defined

A management function

Which evaluates public attitudes

And identifies the policies and procedures

Of an organization with the public interest

And executes a program of action (& communication)

To earn public understanding and acceptance

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Public Relations Management Stages

Determination and
evaluation of public
attitudes

Identification of policies
PR and procedures

Development and
execution of the
program

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Integration of PR into the Promotional Mix

Separate Functions
Marketing Public
Department Relations

Coordinated and Equal

Marketing Public
Department Relations

Integrated
Marketing Public
Department Relations

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Marketing Public Relations Functions

Build market excitement before media ads break

Defend products at risk, give consumers reason to buy

Create ad news where there is no product news

Introduce a product with little or no advertising

Provide a value-added customer service

Build brand-to-customer bonds

Influence the influentials

Improve ROI

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 Benefits of MPR

A cost-effective way to Breaks though the

reach the market clutter

Highly targeted way to Circumvents resistance

conduct public relations to sales efforts

Endorsements by Improved media

independent third parties involvement w/customers

Achievement of Creates influence

credibility among opinion leaders

Makes advertising
Improved ROI
messages more credible

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 Disadvantages of MRP

Lack of control over media

Difficult to tie in slogans or other

advertising devices

Media time and space aren’t

guaranteed

No standards for effective

measurement

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 The Process of Public Relations

Determining
Determining and
and Evaluating
Evaluating Public
Public Attitudes
Attitudes

Establishing
Establishing aa PR
PR Plan
Plan

Developing
Developing and
and Executing
Executing aa PR
PR Program
Program

Measuring
Measuring Program
Program Effectiveness
Effectiveness

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 Implementing the PR Program

Press
Releases

Press
Interviews
Conferences

PR Tools

The
Exclusives
Internet
Community
Involvement

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 Advantages of Public Relations

Credibility

Image Cost
Building Savings

PR
Provides
Avoidance
Selectivity
of Clutter
Lead
Generation

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Potential Problems of Public Relations

Potential for incomplete

communication process

Potential
Potential Receiver not making
Problems
Problems connection to the source

Lack of coordination with

marketing dept.

Inconsistent, redundant
communications

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 Publicity versus Public Relations

Publicity:
The generation of news about a person,
product, or service that appears in the media

A short-term strategy

A subset of public relations

Not always positive

Often originates outside the firm

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 Pros and Cons of Publicity

Advantages Disadvantages

Substantial credibility Timing difficult or

impossible to control

News value Inaccuracy, omission,

or distortion
may result
Significant word-of-
mouth

Perception of media
endorsement

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