Consumer Promotion And Packaging
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Chapter Outline
 How do sales promotions add value
to a brand?
 What are consumer sales promotions
designed to accomplish
and what are their strengths and
limitations?
 What role does packaging play when
consumers make brand decisions?
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Chapter Perspective
Sales promotion and packaging help move
prospects and customers through the decision
process started by other MC functions
Awareness
Interest
Public Relations
Direct Marketing
Website
Desire
Action
Sales Promotion
Packaging
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Opening Case: Snapple
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Opening Case: Snapple
Challenge:
Reinforce the brand’s quirky image
A sales promotion program featuring:
Answer:
Results:
• “Snapple yard sale” theme online
• Live
live yard
yardsales
salesininmajor
majormarkets
markets
• Supported
supported by
by web
web ad
ad banners
banners and
and nonnontraditional media:
• Airplane-towed
airplane-towed banners
banners
• Messages
messages on pizza boxes and deli bags
• Snapple has received significant
press coverage and consumer
interest and involvement
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Sales Promotion
Sales promotion:
An MC function that offers a
tangible added-value designed to
motivate and accelerate a
response
•Primary goal: motivate
consumer behavior—now
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Two Types of Sales Promotion
Consumer Promotion
The use of incentives
to motivate end users
to purchase a brand
and thus pressure
retailers to stock that
brand
Trade Promotion
The use of incentives
to motivate the buying
and reselling of
products
• Used as part of a push
strategy
• Used by marketers as
part of a pull strategy
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Sales Promotion Objectives
Increase Trial and
Repurchase
Increase Frequency
And/or Quantity of
Purchases
Reinforce Brand
Image/Strengthen
Brand Relationships
Counter Competitive
Offers
Objectives
Extend the Use of a
Brand
Cross-sell
Build Customer
Databases
Increase Level of
Customer Retention
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IMC In Action: Catalina Coupons
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IMC In Action: Catalina Coupons
Challenge:
Answer:
Results:
Personalize consumer sales promo offers
Sophisticated product by Catalina that checks
a consumer’s buying history and prints out
personalized coupons at the check-out for:
• $1 off 3 jars to reward a “loyal customer”
• 50¢ off 1 jar to convert a “switcher” from
another brand
• $1 off 1 jar to motivate a “never buyer” to try
the brand
This type of service has become very common
in supermarkets throughout the nation
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Sales Promotion Tools
Premiums
Sweepstakes,
Contests, and
Games
Specialties
Coupons
Tools
Price
Reductions
Sampling
Rebates
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A Company That Sells Specialty Items
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An Example of a Dr.Pepper Coupon Promotion
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Tales From the Real World
Many brand managers love sales
promotions because, unlike some other MC
functions, they can see definite short term
results.
In the real world, it is not unusual for brand
managers to look at a brand’s sales reports
and see a “spike” in sales that immediately
followed a “coupon drop” in newspapers.
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An Example of a Price Reduction Promotion
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Think About It
Fly to NYC for $149*
*one-way based on a round-trip purchase
½ price sale*
*buy one at full price and get ½ off a second of equal or lesser value
Save up to 70%*
*a few racks are on sale for 70% off; other sale items are 20-30% off
• Are these offers ethical?
• What do you think about firms that use
them?
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Consumer Promotion Strategies
Partnership
Strategies
Cross promotion:
• Two or more products are
promoted together, such as
cheese and crackers
• Brands team up to boost their
image power
• They also share in costs
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A CBS/Campbell’s Soup Cross Promotion
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Consumer Promotion Strategies
Loyalty
Strategies
Loyalty marketing:
• Using promotions specifically
designed for customer retention
• Example: punch card
offering a free coffee (“buy
10 and get the 11th one
free”)
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An Example of Marriott Hotels Loyalty Promotion
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What Are Consumer Sales Promotions
Designed To Accomplish?
Strengths
Limitations
• Good at generating
trial
• Drives repurchase
and increased
purchase frequency
• Strengthens
customer
relationships
• Can be copied by
competitors
• Most promotions are
not profitable
• Overuse can lead to
lower brand loyalty
and profits
Vs.
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Packaging
• Often the “last ad seen” for a brand
• Critical for packaged goods
• Heavily promoted products that are usually sold
through food and drug stores in small packages and
carry a low unit price
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Types of Packing
• Primary - The container that directly holds
the product
• Secondary - Any outer wrappings that help
to store, transport, inform, display and
protect the product
• Tertiary - used to group products for storage
and transportation
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Some more information,
• Consumer packaged goods – Products that are
usually sold in food, discount, and drug stores in
small packages and have a low unit price
– Also known as fast-moving consumer goods
• Proprietary packaging – A package design that is
patented to prevent any other brand from using it
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Packaging: The Last Seen Ad
• Estimated that 60 – 70% of
brand decisions are about
packaged goods are not made
until consumers are inside
stores
• Packaging has replaced
salespersons
• Needs to attract attention and
communicate brand
information
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The Five Purposes of Packaging
•
•
•
•
•
Contain
Inform
Protect
Transport
Display
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Contain
• To hold the product directly; this is
PRIMARY packaging
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Inform
• To identify the brand and any related
companies, to explain how it should be
used, to warn about the hazards for misuse,
and to reveal product contents
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Protect
• To prevent spoilage, leakage, breakage,
moisture changes, theft and tampering
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Transport
• To easily and safely move the product from
the manufacturer, perhaps to a warehouse,
then to the retailer and finally, to the
consumer
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Display
• To attractively display, to sell (a marketing
tool)
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Strengths of Packaging
•
•
•
•
•
•
Great at protecting product
Makes a strong visual statement
Continues to communicate
Provides important information
Function as a collectible
Showcases promotions
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Limitations of Packaging
• Packaging is subject to copycat marketing
• Potential for clogging up landfills
• Can be costly
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Insight: Generic Product Packaging
Generic products often come in plain white
packages with black lettering that gives a basic
product description (e.g. paper towels).
Although they are often referred to as
“unbranded,” they are in fact fairly distinctive.
Their unique package design allows customers
to recognize them easily, but more importantly,
the package design cues a certain association
(low-price) and a bundle of perceptions that
differentiates them from competing and
traditional brand-name products.
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Packaging is Critical to Make Brands Stand
Out in The Crowded Cereal Aisle
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Tales From the Real World
Packaging consultants and agencies are now
typically involved in some of the earliest stages
of planning for new or improved products in the
real world.
This early input can lead to unique aspects of a
brand’s package that may even become the
most important aspects of the brand’s MC
program—like the new Heinz squeezable
ketchup bottle.
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This Tag Serves as a Mini Billboard for Gallo Wine
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What Role Does Packaging Play?
Strengths
• Protects the product
• Free media before,
during and
during,
andafter
after
purchase
• Adds
Add value
valueand
and
convenience
Limitations
Vs.
• Can be copied by
competitors
• Can contribute to
waste explosion
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Three – Minute Drill
 Select a Package…
 Improve It…
 Promotion
 Protection
 Both
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Final Note:
While advertising often gets credit
for being the most glamorous part of
MC, sales promotion and packaging
offer the opportunity of being the most
inventive areas—and those best suited
to move consumers through the final
steps in the buying decision toward
purchase
For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin