ADVERTISING:
Sales Promotion
July 17, 2016
Advertising
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Sales Promotion
• A special incentive to:
•
•
•
Distributors
Salespeople, or
Customers
• to encourage an immediate sale
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Growth of Sales Promotion
100%
90%
80%
70%
60%
Consumer Promotions
Media Advertising
50%
40%
30%
20%
Trade Promotions
10%
0%
'89 ‘90 ‘91 ‘92 '93 '94 '95 '96 '97 '98 '99 ‘00
Percent of Total Promotional Dollars, 3-year Moving Average.
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Types of Consumer Promotions Used
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Types of Promotions
• Franchise Building
• LONG TERM preferences
• Communicate distinctive brand identity
• Example:
• “Frequency” programs with brand or store image
• Non-Franchise Building
• IMMEDIATE sales
• Examples:
• Price-off deals
• Bonus packs
• Rebates or refunds
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Objectives of Sales Promotion
•
•
•
•
•
•
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Obtaining trials
Increasing repurchase
Increasing overall consumption
Rewarding current customers
Reaching out to a new market
Enhancing advertising efforts
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Sales Promotion Vehicles
Consumer-Oriented “Pull”
Trade-Oriented “Push”
Samples
Contests, dealer incentives
Coupons
Trade allowances
Premiums
Point-of-purchase displays
Contests/sweepstakes
Dealer premiums
Refunds/rebates
Trade shows
Bonus packs
Cooperative advertising
Price-offs
Event sponsorship
July 17, 2016
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Sampling
Sampling Works Best
When
The Products
Are of Relatively
Low Unit Value,
So Samples
Don’t Cost Much
July 17, 2016
The Products Are
Divisible and Can
Be Broken Into
Small Sizes That
Can Reflect the
Products Features
and Benefits
Advertising
The Purchase
Cycle Is
Relatively Short
So the
Consumer Can
Purchase in a
Relatively Short
Time Period
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Samples -- Media
•
•
•
•
•
•
•
July 17, 2016
Door-to-door
Direct mail
In-store sample pack
Cross-product sampling
Co-op package distribution
With newspaper / magazine
Any of above with coupon
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Display Cards
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Coupons
Advantage
•
Works – will increase sales
Disadvantages
•
May be redeemed by loyal users who
would buy anyway
•
Sometimes difficult to estimate
redemption levels in advance
•
Expensive
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Percent of Sales with Coupons
43%
Disposable Diapers
35%
Ready-to-Eat Cereal
29%
Liquid Detergents
25%
Deodorants
24%
Sanitary Protection
20%
Coffee
12%
Pet Food
11%
Adult Cold Remedies
8%
Carbonated Beverages
7%
Candy
Gum
July 17, 2016
2%
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Sweepstakes and Contests
ADVANTAGES:
•
•
Gets consumer involved with the product
Generates interest and attracts attention
to advertising
DISADVANTAGES
•
•
July 17, 2016
May overshadow the product
May detract from brand image
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Spending on Event Sponsorship
How much is spent
(billions)
Where it is spent
$6
$5
$4
$3
$2
$1
4.705.00
4.20
3.70
3.30
2.80
2.50
2.10
1.75
$0
88 89 90 91 92 93 94 95 96
July 17, 2016
Advertising
10%
9%
67%
Sports
Festivals
Arts
8%
6%
Music
Cause Mktg.
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Benefits of Event Marketing
1. Greater Awareness
2. Associate Product with Event
3. New Potential Clients (Sales)
4. Media Coverage
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The Sales Promotion Trap
Our Firm
Reduce
Promotions
Continue
Promotions
Competition
Reduce
Promotions
July 17, 2016
Continue
Promotions
Lose market share
low profits
Maintain share
low profits
Higher profits for
everyone!
Gain market share
But low profits
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Quote of the day
If you’re selling a product that
needs to be purchased regularly,
and it’s really great,
just give away free samples.
Mike Basil
Professor of Marketing
July 17, 2016
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