Promotion
Professor Carl Mela
BA 460 Product Management
Fuqua School of Business
• Brand
Management
System
• On Building
A Brand
• Managing
Across
Brands
Promotion – 1
Agenda
• Event Marketing
• Sales Promotion
Promotion – 2
Event Marketing
• $3.7 BB business
• Many companies have a separate
department for event marketing
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Sporting Events
Music
Festivals
Causes
Arts
Self created events (Wall of Velcro)
Promotion – 3
Event Marketing Provides
Marketers With:
• Link to segment or lifestyle (4WD
and skiing)
• Increased awareness (Dutch Boy ‘In
the Paint’ basketball)
• Brand associations (Champion plugs
and NASCAR)
• Enhance corporate image (prestige)
Promotion – 4
Event Marketing Provides
Marketers With:
• Signal of commitment to the
community
• Entertain key clients (Iron Dukes)
• Create excitement for employees
Promotion – 5
Event Marketing Risks
• Cannot control events
– Recent football arrests and affect on
brand image
– Ensure target audience is matched and
images favorable
• Payoff hard to measure
– DDB Needham 22 of 37 olympic
sponsors created no connections in
consumers minds.
Promotion – 6
Sales Promotion
• Trade
– Allowances, discounts, etc.
• Consumer
– Coupons, etc.
• Incentive, as opposed to reason to buy
Promotion – 7
Trade Promotions
• Used to obtain distribution and shelf
facings / product placements.
• Used to create temporary price
reductions to the consumer
• Used to control inventory levels (low
or high)
• Talking point for sales force
Promotion – 8
Consumer Promotions
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Franchise building (samples/message)
Non-franchise building (price cuts)
Induce trial
Induce switching
Induce stockpiling
Defend against competitive
promotions
Promotion – 9
Critiques
• Short term orientation hurts brand
• Inventory and production volatility
hurts brand
Promotion – 10
Blattberg et al.
• Learning from supermarket scanner data
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Temporary price cuts substantially increase sales
Higher share brands’ deals work better
More deals lead to a smaller sales spike
Retailers pass through less than 100%
Display and feature have huge effect
Deals affect store traffic - effect is small
Promotions affect sales in complementary
categories.
Promotion – 11
Blattberg et al.
• What we still do not know
– Most of volume comes from switchers (short
run)
– Promotional elasticities exceed price elasticities
– There is a post promotion dip
– How much of deal effect is incremental
– There is a negative long term effect of promotion
• New study I will be doing w/IRI data
Promotion – 12
Summary
• Event Marketing
– Ensure event is for proper target audience and
that associations are favorable
• Sales Promotions
– Incentive, not reason, to purchase
– Excessive use can damage your brands
Promotion – 13