Chapter 17 Promotional Concepts and Strategies
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Sales Promotion – notes
Begin Promotional Plan Project
MARKETING
November 6, 2015
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Sales promotions are short-term incentives offered toencourage buying a good or service.
Sales promotions encourage customers to try newproducts, build awareness, increase purchases or rewardloyalty.
Sales promotions are usually supported by advertisingactivities that include trade promotions and consumerpromotions
Sales Promotion
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Trade Promotions
Trade promotions are sales promotion activitiesdesigned to get support for a product frommanufacturers, wholesalers, and retailers.
More money is actually spent on promoting tobusinesses than to consumers.
Good business ethics require that trade promotionalpayments and awards be offered in a uniformmanner.
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Trade Promotions
Promotional allowances are cash payments ordiscounts given by manufacturers to wholesalers orretailers for performing activities to encourage sales
Example: Offer a discount to stock a largequantity of product
Slotting allowances are cash premiums paid by themanufacturer to a retail chain for the costs involved inplacing a new product on its shelves (buying shelfspace), pay for a retailer’s discount specials on aproduct, store advertising, and display costs
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Trade Promotions
Cooperative advertising is when a manufacturersupports the retailer by helping pay for the cost ofadvertising the product locally
Sales force promotions are awards given to managersand employees who successfully meet or exceed salesquotas
Trade shows and conventions are events at whichbusinesses can showcase new products, encourageincreased sales of existing products, meet customers andpartners in the distribution chain, and gain continuedcompany and product support
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Trade Promotions – Trade Shows
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Sales promotions are sales strategiesdesigned to encourage customers to buya product or service
Consumer Sales Promotions
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Coupons are certificates that entitle customers tocash discounts on goods or services. Current trendis a push to online printing of coupons.
Coupons
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Premiums or giveaways are low-cost items given toconsumers at a discount or for free.
Designed to increase product loyalty or attract newcustomers.
People are more likely to buy a product whenoffered an added-value gift in exchange.
Premiums
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Factory packs – free gifts placed in productpackages or as a container premium
Premiums - Examples
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Traffic builders are low-cost premiums such as pens,key chains, calendars or coffee mugs given away free toconsumers for visiting a new store or attending anevent.
Premiums - Examples
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Coupon plans are ongoing programs offering avariety of premiums in exchange for labels, coupons,or other tokens.
Premiums - Examples
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Incentives generally are higher-priced products earnedand given through contests (games of skill) andsweepstakes (games of chance)
Businesses use incentives to promote many productsbecause they create customer excitement and increasesales.
Incentives
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Deals or price packs offer short-term pricereductions that are marked directly on the label orpackage.
Example: T-shirts $10 each or $6 each for two or more
A deal may also bundle two or
more related items together.
Deals
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A product sample is a free trial size of a product sentthrough the mail, distributed door-to-door, or givenaway at retail stores and trade shows.
Detergents, toothpastes,
shampoos, deodorants,
and colognes are
frequently promoted
this way.
Drug manufacturers give
samples to doctors.
Product Samples
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•Sponsoring company pays a fee for the right to promote itselfand its products at a specific location (site, event, group, orperson).
•Title sponsor: pays to have its name in the name of thesponsored location (Pepsi Center or Sports Authority Field).
Sponsorship
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Promotional tie-ins (aka cross-promotion and cross-selling)involve coordinated sales promotional arrangements between twoor more retailers or manufacturers.
Example: For the promotion of The Wizard of Oz movie, WarnerBrothers coordinated with McDonald's which made a specialHappy Meal with a
Madame Alexander Toy.
Promotional Tie-Ins
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With product placement, an organization candevelop product recognition by making sure thata product is featured in special events, ontelevision, or in the movies.
Product Placement
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Loyalty marketing programs, also called frequentbuyer programs, reward customers for making multiplepurchases. Loyalty marketing was popularized in the1980s by the airline industry, which instituted frequentflyer programs.
Loyalty Marketing Programs
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Point-of-Purchase Displays are displays designed primarily bymanufacturers to hold and display their products.
Usually placed in high traffic areas to promote impulsepurchases.
Point-of-Purchase Displays
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