IBP: Sales Promotion,

Lesson 7: Point-of-Purchase Advertising,

and Support Media, Event
Sponsorship, Product Placements,
and Branded Entertainment
 Learning objectives

• Describe some sales promotion techniques

• Identify role and techniques of point-of-purchase
advertising
• Describe the role of support media in a comprehensive
IBP plan
• Describe the benefit of event sponsorship, product
placements and branded entertainment in building brand

2
 Key terms

• consumer-market sales • event sponsorship

promotion
• media impressions
• trade-market sales promotion
• business-market promotion • leveraging
• coupon • product placement
• price-off deal • authenticity
• free premium • branded entertainment
• self-liquidating premium
• advertising specialties
• sweepstakes
• sampling
• in-store sampling
 CONTENTS

7.1 Sales Promotion, Point-of-Purchase Advertising,

and Support Media
7.2 Event Sponsorship, Product Placements, and
Branded Entertainment
 7.1 Sales Promotion, Point-of-Purchase
Advertising, and Support Media

7.1.1 Sales Promotion Defined

“Using incentives to create a perception of greater
brand value”

 Consumer Market sales promotion

– Induce household consumers to purchase a firm’s brand
 Trade-Market sales promotion
– Motivate distributors, wholesalers, and retailers to stock and
feature a brand
 Business Market sales promotion
– Cultivate buyers in large corporations who make purchase
decisions
 7.1 Sales Promotion, Point-of-Purchase
Advertising, and Support Media

7.1.1 Sales Promotion Defined

o Sales Promotion vs. Advertising
 Short term demand vs. long term demand
 Encourages brand switching vs. brand loyalty
 Induces trial use vs. encourage repeat purchase
 Promotes price vs. image
 Immediate results vs. long term effects
 Measurable results vs. difficult to measure
 7.1 Sales Promotion, Point-of-Purchase
Advertising, and Support Media

7.1.2 The Importance and Growth of Sales Promotion

 Reasons for growth:
– Demand for accountability
– Short-term orientation
– Consumer response to promotions
– Proliferation of brands
– Increased power of retailers
– Media clutter
 7.1 Sales Promotion, Point-of-Purchase
Advertising, and Support Media

7.1.3 Sales Promotion Directed at Consumers

• Objectives for Consumer-Market Sales
Promotion
1. Stimulate trial purchase
2. Stimulate repeat purchases
3. Stimulate larger purchases
4. Introduce a new brand
5. Combat or disrupt competitors
6. Contribute to IBP
 7.1 Sales Promotion, Point-of-Purchase
Advertising, and Support Media

7.1.3 Sales Promotion Directed at Consumers

• Consumer-Market Sales Promotion
Techniques
1. Coupons 2. Price-off deals
3. Premiums 4. Contests/sweeps
5. Samples & trials 6. Phone gift cards
7. Rebates 8. Frequency programs
 Coupons

 Entitles a buyer to a price reduction

for a product or service
 Advantages
– Give a discount to price sensitive consumer while
selling product at full price to others
– Induce brand switching
– Timing and distribution can be controlled
– Stimulates repeat purchases
– Gets regular users to trade up within a brand
array

10
 Ad in Context Example

Coupons are
the most
widely used
form of
consumer
sales
promotion.

11
 Coupons

 Disadvantages
– Time of redemption cannot be controlled
– No way to prevent current customers from
redeeming coupons
– Coupon programs require costly
administration
– Fraud is a serious, chronic problem

12
 Price-Off Deals

 Offers consumer reduced price at point

of purchase through specially marked
packages
 Advantages
– Controllable by manufacturer
– Can effect positive price comparisons
– Consumers believe it increases value
of a known brand
 Disadvantage
– Retailers believe it creates inventory
and pricing problems

13
PPT 17- 13
Premiums and Advertising
Specialties

 Premiums: free or at a reduced price

with another purchase
 Free premiums provide item at no cost
 Self-liquidating premiums require
consumers to pay most of the cost of
the item
 Advertising specialties:
– A message placed on a free, useful
item

14
PPT 17- 14
 Ad in Context Example

Premiums attract attention

to a brand and offer the
consumer something for
free.

PPT 17- 15 15
 Contests and Sweepstakes

 Contests: consumers compete for prizes based

on skill or ability.
 Sweepstakes: winners picked by chance
 Both create excitement and interest
 But . . .
– Legal and regulatory requirements are
complex
– Consumers may focus on the game rather
than the brand
– Difficult to get an IBP message across in a
game

16
PPT 17- 16
 Samples and Trial Offers

 Sampling: Giving consumer an opportunity to

use a brand on a trial basis with little or no risk
 Types of sampling
– In-store (Costco) – Newspaper
– Door-to-door – On-package
– Mail – Mobile (on-site)
 Trial offers
– Used for more expensive items
– Consumer tries product for a fixed time

17
PPT 17- 17
 Phone and Gift Cards

 Manufacturers offer either for free or for

purchase debit cards
– with phone time
– or preset spending limits
 Examples include offers from Starbucks,
Barnes & Noble, and The Gap

18
PPT 17- 18
 Rebates

 Money back offer requiring the buyer to

mail a request for money back from the
manufacturer

 Often tied to multiple purchases

 Many consumers fail to bother sending

in the rebate request form

19
PPT 17- 19
 Frequency Programs

 Also known as continuity

programs

 Offers customers discounts or

free products for repeat
patronage

 Common in airline, hotel, and

restaurant businesses

20
PPT 17- 20
 7.1 Sales Promotion, Point-of-Purchase
Advertising, and Support Media

7.1.4 Sales Promotion Directed at the Trade Channel

and Business Markets
o Objectives for Promotions in the Trade
Market
 Objectives: Uses a “push” strategy: Push the product
into the distribution channel to the consumer:
– Obtain initial distribution
– Increase order size
– Encourage cooperation with consumer market sales
promotions
– Increase store traffic
 7.1 Sales Promotion, Point-of-Purchase
Advertising, and Support Media

7.1.4 Sales Promotion Directed at the Trade Channel and

Business Markets
o Trade-Market Sales Promotion Techniques
 Incentives: Push money
 Allowances: Merchandise allowances, slotting fees, bill-
back allowances, off-invoice allowances
 Sales Training Programs
 Cooperative (Co-Op) Advertising
 7.1 Sales Promotion, Point-of-Purchase
Advertising, and Support Media

7.1.4 Sales Promotion Directed at the Trade Channel and

Business Markets
o Business Market Sales Promotion Techniques
 Trade Shows
 Business gifts
 Premiums and advertising specialties
 Trial offers
 Frequency programs
 Ad in Context Example

Trial offers are very

effective in the business
market. Why?

24
 7.1 Sales Promotion, Point-of-Purchase
Advertising, and Support Media

7.1.5 The Risks of Sales Promotion

 Create a price orientation

 Borrow from future sales

 Alienate loyal customers

 Time and expense

 Legal considerations
 7.1 Sales Promotion, Point-of-Purchase
Advertising, and Support Media

7.1.6 Point-of-Purchase Advertising

 Definition
– Materials used in the retail setting to attract shoppers’ attention to
a brand, to convey primary product benefits, or highlight pricing
information.
– Displays may feature “price-off” deals as well.

 Objectives for Point-of-Purchase Advertising

– Draw consumers’ attention to a brand in the retail setting.
– Maintain purchase loyalty among brand loyal users.
– Stimulate increased or varied usage of the brand.
– Stimulate trial use by users of competitive brands.
 7.1 Sales Promotion, Point-of-Purchase
Advertising, and Support Media

7.1.6 Point-of-Purchase Advertising

o P-O-P Advertising and the Trade and Business
Markets
 Product displays and information sheets encourage retailers to
support one distributor or manufacturer’s brand over another.

 P-O-P promotions can help win precious shelf space and exposure in
a retail setting.

 A P-O-P display should be designed to draw attention to a brand,

increase turnover, and possibly distribute coupons or sweepstakes
entry forms.

 To combat losing business to online shopping, retailers are trying to

enliven the retail environment, and point-of-purchase displays are one
strategy.
 7.1 Sales Promotion, Point-of-Purchase
Advertising, and Support Media

7.1.7 Support Media

 Purpose: To reinforce or extend a message being
delivered through other media

– Signs, billboards, posters

– Transit

– Aerial

– Specialty

– Directory
 Outdoor Signage and
Billboards

 Advantages  Disadvantages
– Wide local exposure – Message limits
– Captivating – Location affects impact
– Around-the-clock – Relatively expensive
exposure – Criticized by
– Address an immediate environmental groups
need or desire

34
PPT 17-34
 Transit Ads

 Transit Ads
– Urban environments
– Demographic segmentation
– Timely to purchase
– Build brand awareness

35
PPT 17-35
 Transit ads
can reach a
target
audience in
well defined
geographic
areas.

PPT 17-38 38
 Aerial Ads

 Aerial Ads
– Blimps increasingly
common
– Common at sporting
events
– Skies are getting
crowded!
– Networks are in
control

39
PPT 17-
 Directory Advertising

 Advantages  Disadvantages
– High acceptance – Too many directories
– High availability – Long lead times
– Final link to purchase – Limited creativity

 New: CD-ROM and Web-based directories

40
PPT 17-40
 Ad in Context Example

Web based
directories offer
convenience
and speed.

41
PPT 17-33
 Packaging

 Promotional Benefits of Packaging to the

Advertiser:
– The package carries the brand name and logo
– The package can communicate “value”
– The package can communicate “image” and
“quality”

42
PPT 17-42
 Ad in Context Example

Packaging
highlights
the brand
name,
quality and
image.

44
PPT 17-44
 7.2 Event Sponsorship, Product
Placements, and Branded Entertainment

7.2.2 Event Sponsorship

 Involves a marketer providing financial support to help
fund an event
 The appeal of event sponsorship:

– Effective media coverage and exposure

– Fan loyalty converts to sales

– Events can foster brand loyalty

– Events attract well-defined audiences

 Ad in Context Example

Event sponsorship can

target well defined
audiences.

46
PPT 18- 46
 7.2 Event Sponsorship, Product
Placements, and Branded Entertainment

7.2.2 Event Sponsorship

o Finding the Sweet Spot: Guidelines for
Sponsorship
1. Match the brand and the event
2. Define the target audience
3. Stick to a few key messages
4. Develop a plot line
5. Deliver exclusivity
6. Deliver relevance
7. Use the Internet
8. Plan for the before and after
 7.2 Event Sponsorship, Product
Placements, and Branded Entertainment

7.2.2 Event Sponsorship

o Managing Event Sponsorship
 Assess the Benefits
– Hard to determine, esp. if CEO ego is involved
– Nielsen has developed software for assessment
– Advertisers seek “media impressions”
 Leverage the Event
– Collateral communication that reinforces the event—news
coverage, word of mouth, etc.
– Can be used to entertain/reward key customers, motivate
sales force and employees
– Can be used to sell branded premiums
 Ad in Context Example

Events can be leveraged to

sell branded premiums.

49
PPT 18- 49
 7.2 Event Sponsorship, Product
Placements, and Branded Entertainment

7.2.3 Product Placements

Placing a branded product in the content of an
entertainment product:
 Television—over 100,000 placements in 2005
 In movies—Under 25 segment most likely to notice and try
brands placed in movies
 In video games—Game placement expenditures could reach $1
billion by 2010
 “Authenticity” and “celebrity connection” are keys to success in
placement
 7.2 Event Sponsorship, Product
Placements, and Branded Entertainment

7.2.4 Branded Entertainment

Branded entertainment entails the development and
support of any entertainment property (e.g., a sporting
event, TV show, theme park, short film, movie, or video
game) where the primary objective is to feature one’s
brand in an effort to impress and connect with
consumers in a unique and compelling way.
 7.2 Event Sponsorship, Product
Placements, and Branded Entertainment

7.2.5 The Coordination Challenge

Events Directories
Newspapers
Television
Internet

Magazines Billboards

Transit Radio Branded

Entertainment
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Quiz 1

• Billboards, posters, and outdoor signs first appeared

in North America when they were used during the
Revolutionary War to keep the civilian population
informed about the war’s status.
a) True
b) False

53
Quiz 2

• The impact of billboards can vary dramatically

depending on their location, and assessing
locations is tedious and time-consuming. What is
the advertising term used when companies may
have to send individuals to the site to see if the
location is desirable?
a. Riding the boards
b. Posting
c. Situation Analysis
d. Preview
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Quiz 3

• Barter promotion is the use of incentive techniques that

create a perception of greater brand value among
consumers, the trade, and business buyers.
a) True
b) False

55
Quiz 4

• The purpose of advertising is to cultivate an image,

loyalty, and repeat purchases over the long term. Which
of the following adequately address the purpose of sales
promotions?
a. encourage more immediate and short-term responses
b. circumvent competition
c. to create exchange
d. cultivate an image, loyalty, and repeat purchases over
the long term

56
Team Project

• Part VI: Design some tools in IBP ( sales promotion,

POP, support media, Branded entertaiment…)