Chapter 16
Sales
Promotion
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Education.
Sales Promotion
“A direct inducement that offers an extra
value or incentive for the product to the sales
force, distributors, or the ultimate consumer
with the primary objective of creating an
immediate sale.”
An extra
incentive to buy
A tool to
speed up sales
Targeted to
different parties
Types of Sales Promotion Activities
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Reasons for the Increase in Sales
Promotion
Growing power of retailers and declining brand loyalty
Increased promotional sensitivity
Brand proliferation
Fragmentation of the consumer market
Short-term focus and increased accountability
Competition and clutter
Growth of digital marketing
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Consumer Franchise-Building versus
Nonfranchise-Building Promotions
Consumer franchise-building (CFB)
Nonfranchise-building (non-FB)
promotions
promotions
• Communicate distinctive brand attributes
• Accelerate the purchase decision process
and contribute to the development and
and generate an immediate increase in
reinforcement of brand identity
sales
• Build long-term brand preference
• Help achieve full-price purchases that are
not dependent on promotional offers
• Capable of converting consumers to loyal
• Do not contribute to the building of brand
identity and image
• Merely borrow customers from other
brands
customers
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Sampling
Sampling Works
Best When
Products are of
relatively low
unit value, so
samples don’t
cost much
Products are
divisible and can
be broken into
small sizes that
reflect the
products features
and benefits
Purchase cycle
is relatively
short so the
consumer can
soon purchase
again
Sampling Methods
Door-to-door sampling
Sampling through the mail
In-store sampling
On-package sampling
Event sampling
Sampling through magazines and newspapers
Sample request forms
Sampling through the internet and social media
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Advantages and Limitations of
Couponing
Advantages
• Appeals to price-sensitive customers
• Does not require retailers’ cooperation
• Reduces consumer’s perceived risk
associated with trial of a new brand
• Encourages repeat purchase
• Helps coax users to trade up to more
expensive brands
Limitations
• Estimating how many consumers will use a
coupon and when is difficult
• Less effective for inducing initial product
trial in a short period
• Consumers already using the brand cannot
be prevented from using the coupons
• Have low redemption rates and high costs
• Could result in misredemptions
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Types of Premium
 Free premiums: Small gifts or merchandise:
 Included in the product package
 Sent to consumers who mail in a request along with
a proof of purchase
 Self-liquidating premiums: Require the consumer
to pay:
 Some or all of the cost of the premium
 Handling and mailing costs
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Contests and Sweepstakes
Sweepstakes
Promotion where winners are
determined purely by chance
Cannot require proof of purchase
as a condition for entry
Winners chosen by random selection from
pool of entries or generation of a number
to match those held by game entrants
Consumers compete for prizes or money
on the basis of skills or ability
Contest
Winners determined by judging entries
or ascertaining which entry is closest
to predetermined criteria
Advantages & Limitations of Refunds
and Rebates
Advantages
Limitations
Too much effort
to obtain savings
Responsive
consumers
Perception of rebates
to sell products that
are not selling well
Creates new users
Other incentives
are more effective
for small refunds
Encourage repeat
purchases
Perceived price
reduction
Dependence leads
to delayed
purchases
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Advantages and Limitations of Bonus
Packs
Advantages
•
•
•
•
Direct way to provide extra value
Have a strong impact on the purchase decision at the time of purchase
Effective defensive maneuver against competitor’s promotion
May result in larger purchase orders and favorable display space in
stores
Limitations
• Require additional shelf space without providing extra profit margins
for retailers
• Appeal primarily only to current users and promotion-sensitive
consumers
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Advantages and Limitations of Price-off
Deals
Advantages
• Ensure discounts reach the consumers
• Present a readily apparent value to shoppers
• Encourage consumers to purchase larger quantities
Limitations
• Can create pricing and inventory problems
• Appeal primarily to regular users and not new users
• Must adhere to regulations set by the Federal Trade
Commission
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Event Marketing versus Event
sponsorship
Event marketing
• Company or brand is linked to an
Event sponsorship
• Company develops sponsorship
event, or a themed activity is
relations with an event and
developed to:
provides financial support in
• Create experiences for
return for:
consumers
• Promote a product or service
• Right to display a brand name,
logo, or advertising message
• Being identified as a supporter
of the event
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Figure 16.5 - Consumer-Oriented Sales Promotion
Tools for Various Marketing Objectives
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McGraw-Hill Education.
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Types of Trade Oriented Promotions
Contests and incentives
Types
Co-op Advertising
Trade allowances
POP displays
Buying
Sales training
Promotional
Trade shows
Slotting
Types of Cooperative Advertising
Horizontal cooperative advertising
• Sponsored by a group of retailers providing products or services
to the market
Ingredient-sponsored cooperative advertising
• Supported by raw materials manufacturers
• Establishes end products that include the company’s materials
and/or ingredients
Vertical cooperative advertising
• Manufacturer pays for a portion of the advertising a retailer runs
to promote the manufacturer’s product
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Figure 16.8 - The Sales Promotion Trap
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McGraw-Hill Education.
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