ADVERTISING: Sales Promotion

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ADVERTISINGSales Promotion
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Sales Promotion

• A special incentive to
• Distributors
• Salespeople, or
• Customers
• to encourage an immediate sale

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Growth of Sales Promotion
100
90
80
70
60
50
40
30
20
10
0
'89
90
91
92
'93
'94
'95
'96
'97
'98
'99
00
Percent of Total Promotional Dollars, 3-year
Moving Average.
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Types of Consumer Promotions Used
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Types of Promotions

• Franchise Building
• LONG TERM preferences
• Communicate distinctive brand identity
• Example
• Frequency programs with brand or store image
• Non-Franchise Building
• IMMEDIATE sales
• Examples
• Price-off deals
• Bonus packs
• Rebates or refunds

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Objectives of Sales Promotion

• Obtaining trials
• Increasing repurchase
• Increasing overall consumption
• Rewarding current customers
• Reaching out to a new market
• Enhancing advertising efforts

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Sales Promotion Vehicles
Consumer-Oriented Pull
Trade-Oriented Push
Samples
Contests, dealer incentives
Coupons
Trade allowances
Premiums
Point-of-purchase displays
Contests/sweepstakes
Dealer premiums
Refunds/rebates
Trade shows
Bonus packs
Cooperative advertising
Price-offs
Event sponsorship
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Sampling
Sampling Works Best When
The Products Are of Relatively Low Unit Value, So
Samples Dont Cost Much
The Products Are Divisible and Can Be Broken Into
Small Sizes That Can Reflect the Products
Features and Benefits
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Samples -- Media

• Door-to-door
• Direct mail
• In-store sample pack
• Cross-product sampling
• Co-op package distribution
• With newspaper / magazine
• Any of above with coupon

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Display Cards
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Coupons

• Advantage
• Works will increase sales
• Disadvantages
• May be redeemed by loyal users who would buy
  anyway
• Sometimes difficult to estimate redemption levels
  in advance
• Expensive

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Percent of Sales with Coupons
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Sweepstakes and Contests

• ADVANTAGES
• Gets consumer involved with the product
• Generates interest and attracts attention to
  advertising
• DISADVANTAGES
• May overshadow the product
• May detract from brand image

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Spending on Event Sponsorship
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Benefits of Event Marketing
1. Greater Awareness 2. Associate Product with
Event 3. New Potential Clients (Sales) 4. Media
Coverage
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The Sales Promotion Trap
Our Firm
Continue Promotions
Reduce Promotions
Lose market share low profits

• Maintain share
• low profits

Continue Promotions
Competition
Gain market share But low profits
Higher profits for everyone!
Reduce Promotions
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Quote of the day

• If youre selling a product that needs to be
  purchased regularly, and its really great,
• just give away free samples.
• Mike Basil
• Professor of Marketing