“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
$300 billion in 2008
 Growth rate: 4-8 percent
 Reasons for growth:

›
›
›
›
›
›
Demand for accountability
Short-term orientation
Consumer response to promotions
Proliferation of brands
Increased power of retailers
Media clutter

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
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
Push Policy
Producer
Pull Policy
Producer
Wholesaler
Wholesaler
Retailer
Retailer
Consumer
Consumer
Information Flow
Coupons
Gift Cards
Incentives
Premiums
Brand
placements
Allowances
Sampling
Loyalty
Programs
Contests
Sweepstakes
Price-off
deals
Trade Shows
Point of Purchase Displays
1. Coupons
2. Price-off deals
3. Premiums
4. Contests/sweeps
5. Samples & trials
6. Phone gift cards
7. Brand placements
8. Rebates
9. Frequency programs
10.Event sponsorship

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
Ad in Context Example
Coupons
are the most
widely used
form of
consumer
sales
promotion.
10

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
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
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
Ad in Context Example
Premiums attract
attention to a brand and
offer the consumer
something for free.
14




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
Sampling: Giving consumer an
opportunity to use a brand on a trial
basis with little or no risk
 Types of sampling

› In-store(Costco)
› Door-to-door
› Mail

Trial offers
– Newspaper
– On-package
– Mobile (on-site)
› Used for more expensive items
› Consumer tries product for a fixed time

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

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

Also known as continuity
programs

Offers customers discounts or
free products for repeat
patronage

Common in airline, hotel, and
restaurant businesses

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
 Incentives: Push money
 Allowances: Merchandise allowances, slotting
fees, bill- back allowances, off-invoice allowances
 Sales Training Programs
 Cooperative (Co-Op) Advertising
 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?
23
 Create a price orientation
 Borrow from future sales
 Alienate loyal customers
 Time and expense
 Legal considerations

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.

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.

Purpose: To reinforce or extend a
message being delivered through other
media
› Signs, billboards, posters
› Transit
› Aerial
› Specialty
› Directory

Advantages
›
›
›
›
 Disadvantages
Wide local
– Message limits
exposure
– Location affects
Captivating
impact
Around-the-clock – Relatively
exposure
expensive
Address an
– Criticized by
immediate need
environmental
or desire
groups

Transit Ads
› Urban environments
› Demographic
segmentation
› Timely to purchase
› Build brand awareness
Ad in Context Example
Transit ads
can reach a
target
audience in
well defined
geographic
areas.
30
 Aerial Ads
– Blimps increasingly
common
– Common at sporting
events
– Skies are getting
crowded!
– Networks are in control

Advantages
› High acceptance
› High availability
› Final link to
purchase
 Disadvantages
– Too many
directories
– Long lead times
– Limited creativity
 New: CD-ROM and Web-based directories
Ad in Context Example
Web based
directories
offer
convenience
and speed.
33

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”
Ad in Context Example
Packaging
highlights
the brand
name,
quality
and
image.

Guerrilla Marketing—”Stunt” promotions

Viral campaigns—Using influencers
(Chapter 20)

Special Events—Creating visibility and
“affinity” for a brand among a highly
select target group