Session 5 Sales Promotion
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Sales Promotion Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-1 Boony Doll a ‘boonanza’ for sales promotion Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-2 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. A tool to speed up sales An extra incentive to buy Targeted to different parties Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-3 Sales promotion vehicles Consumer-oriented Samples Coupons Trade-oriented Contests, dealer incentives Trade allowances Premiums Contests/sweepstakes Point-of-purchase displays Refunds/rebates Training programs Bonus packs Trade shows Price-off deals Cooperative advertising Loyalty programs Event marketing Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-4 Explanations for increase in sales promotion Growing power of retailers Some reasons Declining brand loyalty Increased promotional sensitivity Brand proliferation Fragmentation of consumer markets Short-term focus of marketers Increased accountability Clutter Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-5 The shifting role of the sales promotion agency Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-6 Consumer-oriented sales promotion Identify target audiences Determine sales promotion objectives Obtain trial and repurchase Increase consumption Target a specific market segment Defend current customers Enhance IMC and build brand equity Set measurable goals Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-7 Myer gift with purchase Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-8 Types of consumer promotions used by packaged goods manufacturers Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-9 Sampling Sampling works best when The products are of relatively low unit value, so samples do not cost much The products are divisible and can be broken into small sizes that can reflect the product’s features and benefits Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia The purchase cycle is relatively short so the consumer can purchase in a relatively short time period 15-10 Bertoli’s ‘Taste of Tuscany’ Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-11 Sampling distribution Door-to-door Methods Direct mail In-store sampling On-package sampling Event sampling With magazine/newspaper Other Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-12 Bundle of baby products Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-13 Coupons The oldest and most widely used sales promotion tool Coupons Used by virtually all packaged goods manufacturers Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-14 Advantages and limitations of coupons Advantages Disadvantages Appeal to price-sensitive consumer Difficult to determine how many consumers will use coupons and when Can offer price break without retailer’s cooperation Coupons are often used by loyal consumers who may purchase anyway Can be effective way to induce trial of new or existing products Can be way to defend market share and encourage repurchase Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Declining redemption rates and high costs of couponing Misredemption and fraud 15-15 Coupon distribution Other Magazines In/on pack Direct mail Newspaper coop. Shop-a-docket Freestanding inserts Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-16 Shop-a-docket: an Australian innovation Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-17 Premiums Premium: an offer of an item of merchandise or service either free or at a low cost that is an extra incentive for customers Two types of premiums Free premiums: Only require purchase of the product Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Self-liquidating premiums: require consumer to pay some or all of the cost of the premium 15-18 McDonald’s Happy Meals Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-19 Contests and sweepstakes Contest: a promotion where consumers compete for prizes or money on the basis of skills or ability. Winners are determined by judging entries or ascertaining which entry comes closest to some predetermined criteria. Sweepstakes/games: a promotion where winners are determined purely by chance and cannot require a proof of purchase as a condition for entry. Winners are chosen by random selection from a pool of entries or generation of a number to match those held by game entrants. Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-20 Problems with contests and sweepstakes Do not contribute to brand building Problems Focus not on brand Effectiveness Effectiveness Legal considerations Negative publicity May generate negative publicity Federal regulations Use by professionals or hobbyists Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-21 Other popular consumer sales promotion tools Bonus packs Refunds and rebates Other promotional tools Event marketing Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Price-off deals Frequency/ loyalty programs 15-22 A bonus for consumers Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-23 Loyalty programs Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-24 Summary of consumer-oriented promotions and market objectives Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-25 Trade-oriented sales promotion objectives Maintain trade support for existing products Obtain distribution of new products Objectives Build retail inventories Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Encourage retailers to display existing brands 15-26 Types of trade-oriented promotions Contests and incentives Trade allowances Buying Buying allowances Allowances Point-of-purchase displays Promotional Promotional Allowances allowances Sales training programs Trade shows Slotting Slotting Allowances allowances Cooperative advertising Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-27 Types of cooperative advertising Ingredientsponsored coop advertising Horizontal cooperative advertising Cooperative advertising Vertical cooperative advertising Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-28 The sales promotion trap 1 3 Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 2 4 15-29 Summary and conclusions • Over the past two decades, marketers have been allocating increased share of promotional budget to sales promotion. • Sales promotion techniques can be: – consumer oriented – trade oriented. • Sales promotion techniques include sampling, coupons, premiums, competitions, rebates and refunds. • Sales promotion abuse can occur when marketers become overly dependent on sales promotions techniques at the expense of building long-term brand position, brand equity and customer relationships. Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia 15-30
