PART FIVE: INTEGRATION AND
EVALUATION
Chapter 16
Wells, Moriarty, Burnett & Lwin
ADVERTISING Principles and
Effective IMC Practice
Koekemoer L. (2004)., Marketing
Communications, Juta and
Company Ltd.
Revised by Chutinun K, 2014.
SALES PROMOTION,
EVENTS, AND
SPONSORSHIPS
Key Points
• Explain the principles that drive the use of
sales promotion
• List and explain the use of various consumer
promotions
• Summarize the types and purposes of trade
promotions
• Describe the use of other types of
promotions
• Explain the strategic use of promotions in
marketing
Growth of Sales promotion?
Company Side
Consumer Side
•
Need for short-term profit
•
•
Easy to evaluate the impact
(from sales volume)
•
•
High cost of Media
•
•
Market share: battle for
market share instead of
product growth
•
•
Consumer behavior: less loyal to
brand names
Added value: reduce the risk of
purchase, get more for less
Pricing: expect the short term
price reduction
Parity products: increasing sales
when products are largely
undifferentiating
Power of the retailer: dominant
retailers demand incentives to
offer shelf space
Sales Promotion
• A marketing discipline that utilizes a variety of incentive
techniques to structure sales-related programs that
generate a specific, measurable action or response
• cost less, produce immediate results (short-term sales)
• Consumers  risk  value added (more for less)
Types of Sales promotion
1. Consumer Sales Promotion
is a promotion aim at ultimate consumers
of products
2. Trade Sales Promotion
is a value added program directed at trade
members (resellers)
Push, Pull, and Combination Strategies
1. Consumer Sales Promotion
1. Price Deals
2. Coupons
3. Refunds and Rebates
4. Sampling
5. Contests and Sweepstakes
6. Premiums
7. Specialties items
1. Consumer Sales Promotion
Price Deals
 Cents-off deals:
Reduce prices e.g. 20% discount, 50 % discount
 Price–pack deals (value pack):
They can take any of the two forms;
Bonus pack:
offer additional amount of the product being
purchased but contain in the packaging
Ex: 25%more in this bottle of ketchup
Banded pack:
more units of a product sold at a lower price than if
they were bought a the regular singular unit price
Ex: buy two get one free
1. Consumer Sales Promotion
Coupon
Coupon: are small written contracts that grant holders a
price reduction or other benefits within time frame
 Retailer-sponsored coupons:
redeemable only at the specified outlet
 Manufacturer-sponsored coupons:
redeemable at any outlet (distributor)
1. Consumer Sales Promotion
Refund and
Rebate
Refund and rebate:
Offer to return the certain amount of money to the
consumer or sometimes it may be a coupon or other
benefits to encourage repeat use.
Sampling
Sampling:
Allow the consumer to try the sample of the product
1. Consumer Sales Promotion
Contest
Contest: Engage consumers who compete for prizes
based on some sort of skill or ability.
Sweepstakes
Sweepstakes: Award prizes to consumers.
Based on luck or chance of selection
Specialties items
Specialties items: Give- away items as a reminder
for the brand
1. Consumer Sales Promotion
Premium
Premium: an extra product or tangible reward for consumer’s
particular behaviors, usually purchasing
Direct premium award given at the time of purchase
•
•
•
•
Store premiums: given to customers at the retail site
In-pack premiums are inserted in the package at the factory
On-pack premiums are placed outside the package
Container premiums in which the package is the premium
Free-in-the-mail premium
A free-in-the-mail premiums is usually an item (not available in shops)
that is sent to selected consumers who provide proof of purchase.
Self-liquidating premium
Consumers are expected to provide a specified number of proofs of
purchase and to pay a 'nominal' sum for the premium, plus mailing and
handling costs, in essence, consumers pay the actual cost of the
premium.
2. Trade Sales Promotion
1.
2.
3.
4.
5.
Point-of-purchase (POP) display
Retailer (dealer) kits
Trade shows and exhibition
Contest
Trade incentive and deals
I.
Bonuses (push money, spiff)
II. Dealer loaders
III. Buying Allowances
IV. Advertising Allowance
V. Cooperative ads
VI. Display Allowances
Trade Support
Excitement
• Goal
o Designed by manufacturer to get cooperation of
people in distribution channel (trade member)
o Encourage the promotion of product to the consumer
o Gauged from sales volume
• Target: Resellers (wholesaler, retailer)
• 2 Roles:
1) Trade support: to stimulate in-store
merchandising, superior store location, shelf
space
2) Excitement: to create the high level of attention
from resellers about the product  sales
2. Trade Sales Promotion
• Point-of-purchase (POP) display:
Manufacturer-designed display distributed to retailers to get
attention from the customers
o Special rack, display carton, banner, sticker, signs, price card, etc.
• Retailer (dealer) kits:
Materials and information to help retailer sell ability such as
price information, product specification, product display
instruction, etc.
• Trade shows and exhibition: provide opportunities to exchange
information, demonstrate and sample products and sell
merchandise (usu. same industry)
• Contest and sweepstakes:
can motivate resellers (increase relationship)
• Trade incentive and deals: Reward for purchasing at the certain
amount of product.
I.
II.
III.
IV.
V.
VI.
Bonuses (push money, spiff): monetary bonus paid to store’s
salesperson based on the units that salesperson sells
over a period of time
Dealer loaders are premiums (=consumer premium) a manufacturer
gives to a retailer for buying a certain amount of product e.g. free trip
Buying Allowances: is a price reducing and reward program for trade
to purchase in a certain amount of product (discount)
Display Allowances: direct payment of cash or goods is given to the
resellers if the resellers agree to set up the point-of-purchase (POP)
Advertising Allowance: the manufacturer pays the resellers a certain
amount of money to advertise the manufacturer’s product (flat
amount or percentage according to the gross purchase)
Cooperative ads.: contractual arrangement between manufacturer
and resellers, the manufacturer agrees to pay a part or all ad
expenses incurred by the resellers.
Promotions that across the lines
•
•
•
•
•
Event Marketing
Sponsorship
Interactive and Internet Promotions
Loyalty Programs
Partnership Promotions
• Sponsorship: Company supports an event either financially or by
donating supplies and services
• Event marketing: Building product marketing’s program around a
sponsored event. Practice of linking a brand to an event that usually
matches the brand to the target market’s lifestyle
e.g. Greenwave + Fat Festival
• Interactive and Internet Promotion: There are a number of ways that
advertisers can use the internet for sales promotion program. Ex:
sampling, sweepstakes, contests, coupons, etc.
• Loyalty Program (loyalty program or continuity program):
is a promotion to increase customer retention in order to keep and
reward the continued patronage e.g. member card, airline frequent
flier program
 Higher purchase,  Greater Benefit
• Partnership programs
o Co-marketing:
Two separate brands develop a marketing communication
program together e.g. P&G with Tesco Lotus
o Co-Branding: Two companies come together to offer a
product
o Tie-ins: associate complementary brands linking two
complementary products in a promotion and also in an
advertisement. 2 products joined  bigger impact ,share the
advertising cost
o Licensing agreements (rents): A company’s legal permission
for other manufacturers to use their company’s logos,
symbols, trade characters, identities for or use on other
product. e.g. Waltz Disney products (the comp. gets money +
extend the brand)