Learning Target
AST1-1: Understand that marketing is all
Sales Promotions
Promotional Mix
1.
Advertising
2.
SALES PROMOTION
3.
Public Relations & Publicity
4.Personal Selling
Sales promotions
are short-term
incentives offered to encourage buying a
good or service.
Goal: to increase demand and stimulate
Sales Promotion
Sales promotions can be directed toward:
Manufacturers
Wholesalers
Retailers
Consumers
Employees
Sales promotions are usually supported by
advertising agencies.
Sales promotions may be either
Trade Promotions
Trade promotions
are sales promotion
activities designed to gain manufacturers’,
wholesalers’, and retailers’ support for a
product.
More $$$ is spent promoting to businesses than
to consumers.
Major trade promotions:
Slotting allowances
Buying allowances
Trade shows and conventions
Trade Promotions
Slotting allowances
Cash premium paid by the manufacturer to a retail
chain for the costs involved in placing a new products on its shelves
Can range from a few thousand dollars to more than $100,000 per product
Buying allowances
Price discount given by manufacturers to wholesalers
and retailers to encourage the purchase of a product
Sometimes used to encourage buying a larger quantity of a product
Discount results in more money for wholesalers and
Trade Promotions
Trade shows and conventions
Designed to reach wholesalers and retailers
Provide businesses with opportunities to introduce new
products, encourage increased sales of existing products, and gain continued company and product support
Sales incentives
Awards given to managers and employees who
successfully meet or exceed a sales quota
Quotas can apply to a specific period of time or for a
particular product or line of product.
Consumer Sales
Promotions
Consumer promotions
are sales promotion
efforts designed to encourage customers to
buy a product.
More than half the household in the United States
take advantage of sales promotions each year.
Major sales promotion devices:
Premiums Incentives
Product samples
Loyalty marketing programs Promotional tie-ins
Product placement
Consumer Sales
Promotions
Premiums
Low-cost items given to consumers at a discount
or for free
Designed to increase sales by building product loyalty and
attracting new customers
Fundamental concept behind premium marketing
is that people will be more motivated to buy a product when they are offered an “added value” gift in exchange
While price is often the determining factor in the
Consumer Sales
Promotions
Premiums
When planning premiums, consider this:
1. Premiums should be low cost
2. Premiums should provide added value
3. Premiums should aim to negate the targeted audienc
e’s price issue
4. Premiums should effectively differentiate the product
from the competition
5. Premiums should create an immediate need to buy
Four types of popular premiums are coupons,
Consumer Sales
Promotions
Premiums
Coupons
Certificates that entitle customers to cash discounts
on goods or services
Coupons are used to introduce new products,
enhance sales of existing products, and encourage retailers to stock and display both.
Coupons are very popular yet distribution has been
steadily declining in recent years. Low redemption rate
Difficulty targeting specific customers High cost
Many companies (P&G, Kraft) are reevaluating their
Consumer Sales
Promotions
Premiums
Factory packs
Free gifts placed in product packages, on product packages,
or as a container premium (a product container that, when empty can be used as a container for other items)
Especially popular with cereal manufacturers and other products for children
• Ex.-Cracker Jacks!
Traffic builders
Low-cost premiums, such as key chains and calendars,
which are given away free to consumers for visiting a new store, attending a special event, or participating in a
particular service
Consumer Sales
Promotions
Premiums
Coupon plans
Ongoing program offering a variety of
premiums in exchange for labels, coupons,
or other token from one of more purchases
Ex.- POG hat for five UPC labels
Costs for premiums are incurred by the
Consumer Sales
Promotions
Incentives
Higher-priced products earned and given
through contests, sweepstakes, and
rebates
Used to promote products because
they create customer excitement and
increase sales
Common types of popular incentives are
Consumer Sales
Promotions
Incentives
Contests
Games or activities that require the participant to
demonstrate a skill
Can include writing an essay about a product, naming a new
product, or creating a new advertising slogan
Prizes can include scholarships, vacations, and $
Sweepstakes
Games of chance that can earn small or large prizes
• Ex.- McDonald’s Monopoly
Rebates
Discounts offered by manufacturers to customers who
purchase an item during a given time period
Consumer Sales
Promotions
Product samples
Free trial-size of a product sent through the mail,
distributed door-to-door, or given away at retail stores or trade shows
Ex.-Detergent, toothpaste, shampoo,…
Important in promoting NEW products
Promotional tie-ins
Involve sales promotional arrangements between
one or more retailers or manufacturers
They combine their resources to do a promotion that creates additional sales for each partner
Ex.-McDonald’s Happy Meal, Disney studios, and Fisher Price
toys
Designed to stimulate customer response to a
Consumer Sales
Promotions
Product placement
Occurs when organizations develop product recognition by
making sure that it is featured in special events, on television, or in the movies
The hope is that the strategic placement of an item will increase
or enhance the public’s knowledge about a particular product.
Ex.-Reese’s Piece in “ET”, AOL in “You’ve Got Mail”, iMac on “Ally
McBeal”
Visual merchandising and displays
Refers to the coordination of all physical elements in a place
of business so that it projects the “right image” to its customers
Includes window, floor, counter, and other in-store display
techniques
Consumer Sales
Promotions
Loyalty marketing programs
“Frequent buyer programs” reward customers for
making multiple purchases
Popularized in the 1980s by airlines and their frequent flier programs
Hotel industry has adopted similar programs in which
consumers can earn free lodging after spending a certain amount.
Offers consumers incentives NOT to consider
other alternatives
Other industries are adopted loyalty marketing programs.