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1、Sales Promotion, Events, and Sponsorships,Advertising Principles and Practices,16-2,Questions Well Answer,Which principles drive the use of sales promotion and what are some current trends? How are various consumer promotions used? What are the types and purposes of trade promotions? How do other ty
2、pes of promotionssponsorships and events, interactive promotions, loyalty programs, and co-marketing programs work? How are promotions used strategically in marketing in terms of brand building, new product launches, integration, and effectiveness?,Frontier Campaigns for Votes and Hits,Frontier want
3、ed to encourage customers to book online to save money and build their database. Citizens voted for their favorite animal online; animals “campaigned” on the Web site. The results: 4,000 blog entries, a million votes, a 50% increase in Web traffic, and a 400% increase in qualified email addresses.,1
4、6-3,Prentice Hall, 2009,16-4,What is sales promotion?,When a marketer increases the value of its product or brand by offering an extra incentive to purchase it. Designed to encourage action. AMA: “The media and non-media marketing pressure applied for a predetermined, limited period of time at the l
5、evel of consumer, retailer, or wholesaler in order to stimulate trial, increase consumer demand, or improve product availability.”,Principle: Sales promotion is primarily designed to motivate people to act by offering incentives.,16-5,Changes in the Promotion Industry,In the past, advertising had do
6、minated marketing spending. Today, more than 2/3 of all firms plan promotions as part of their strategy. Global incentive programs have increased dramatically; online promotions are growing at a rate of about 27% annually.,16-6,Reasons for Sales Promotion Growth,Pressure for short-term profits Risin
7、g cost of mass (traditional) media Need for accountability Sales promotions are easy to track and evaluate Escalation of traditional media costs Promotions cost less and deliver tangible results Easier and quicker to determine if objectives have been met Usually, theres an immediate response,Princip
8、le: Sales promotion reduces the risk of trying a new product by giving something of added value to motivate action.,16-7,Reasons for Promotion GrowthBased on Marketplace Changes,Consumer behavior Shoppers switch more easily Pricing Consumers expect coupons, sales, discounting Market share Increased
9、switching leads to increased market share Parity products Promotions can distinguish between similar products Power of the retailer Wal-Mart, Home Depot, Toys “R” Us and others demand promotional incentives,16-8,Categories of Sales Promotion,Consumer Targeted to consumer: people like you and me Trad
10、e Targeted to people/companies in the distribution channel such as buyers, brokers, distributors, wholesales, dealers, franchisees, retailers, etc. Sales Force Directed at the firms salespeople to motivate them to increase their sales including training, sales presentations, support materials, incen
11、tives, performance bonuses, contests,16-9,Types of Consumer Promotions,Price Dealscontemporary price reduction or sale Cents-off deal Price-pack deals (prize in cereal box) Bonus packs (25% more) Banded packs (toothpaste and brush) Coupon Retailer: redeemable only at their outlet Manufacturer: at an
12、y outlet carrying the product,16-10,Types of Consumer Promotions,Refunds and Rebates Marketers offer to return a certain amount of money to the consumer who purchases the product (or coupon to encourage repeat use) Sampling Allowing the consumer to try the product or service (in-store, mailed, denti
13、st office, newspaper) StartS,Visit the Site,With free membership in StartS you can “try something new” and earn “frequent flyer miles” which, when accumulated, can be redeemed for gifts.,16-11,Types of Consumer Promotions,Contests and Sweepstakes Create excitement by promising “something for nothing
14、” and offering impressive prizes Contests based on skill/ ability; you compete for prizes Sweepstakes based on luck; send in your name for a drawing Premiums Tangible reward for a particular act Work by adding value to the product Self-liquidating Specialties Presents the brands name on something th
15、at is given away as a reminder,16-12,How to Use Consumer Promotions,Awareness McDonalds “movie” toys Trial Get the right people involved with the product through sampling, price deals, coupons, refunds, rebates Maintain/increase market share Convince people to switch Price deals work with low-loyalt
16、y products Characters on premiums associate the brand with the character Brand reminder Remind customers of positive experience with ad copy, specialty items, thank you gifts,16-13,What are trade promotions?,Tradeall those involved in the channel of distribution including buyers, brokers, distributo
17、rs, wholesalers. Marketers try to get the “trade” involved in promotions to make their marketing effort effective. Trade promotions give channel members information about products and their selling points to encourage them to provide shelf space and push products.,Principle: Consumer promotion is of
18、 little use if the product isnt available where the consumer can find it.,16-14,Promo Magazine,Visit the Site,PROMO magazine provides insights into using promotion marketing as a strategic, measurable component of an overall marketing mix.,16-15,Types of Trade Promotions: Point-of-Purchase (POP) Dis
19、play,Manufacturers design and distribute displays to retailers to draw attention to their products. Racks, display cartons, banners, signs, moving parts, lights, action.,16-16,Types of Trade Promotions: Retailer (Dealer) Kits,Materials that support retailers selling efforts or help representatives m
20、ake sales calls on prospective retailing customers. Product spec sheets, ad slicks/discs.,16-17,Types of Trade Promotions: Trade Incentives and Deals,When a manufacturer gives sellers a financial reward for purchasing a certain amount of product or supporting a promotion Includes special displays, e
21、xtra purchases, superior store locations, more local promotion Retailers get special discounts, free goods, gifts, cash from manufacturer Advertising allowances: deals on coop advertising and deals for using promotional displays,16-18,Types of Trade Promotions: Contests,Advertisers can develop conte
22、sts and sweepstakes to motivate resellers Contests are far more common than sweepstakes because they can be more closely tied to product sales The store or person who exceeds the quota by the greatest percentage wins the contest,16-19,Types of Trade Promotions: Trade Shows and Exhibits,When companie
23、s in the same industry gather to present and sell their merchandise and demonstrate their products.,16-20,How to Use Trade Promotions,The two primary roles for a trade promotion: Stimulating in-store merchandising or other trade support. Creating excitement among those responsible for selling the pr
24、oduct. Trade promotions are also used to: Manipulate wholesalers and retailers inventory levels. Expand product distribution to new geographic areas or classes of trade.,16-21,How to Use Trade Promotions,Manipulate Demand Pull Strategies creating or increasing customer demand so product is “pulled”
25、through the channel. Push Strategies give channel members reasons to carry products or give them better shelf space so product is “pushed” through the channel. Attention POPs get attention and stimulate impulse purchases. Motivation Contests, trade deals, and other incentives motivate trade/channel
26、members to make sales. Information Trade show displays give information about products, allow companies to gather, and compare products.,16-22,What are crossover promotions?,Promotions that cross over to other areas of marketing and blur the lines between promotion, advertising, and public relations
27、. Sponsorships Event marketing Interactive and Internet promotions Loyalty programs Comarketing/partnership promotions,16-23,Crossover Promotions: Sponsorships and Event Marketing,Sponsorshipscompanies support an event, sporting event, concert, or charity either financially or by donating supplies a
28、nd services. Event marketingbuilding a products marketing program around a sponsored event, such as the Olympics or a golf tournament.,16-24,Crossover Promotions: Other Promotional Support,Blimps, balloons, inflatables, and skywriting planes capture attention and create excitement at events Goodyear
29、 Blimp Met Lifes Snoopy blimps Inflatable Spiderman to promote the movie Internet sweepstakes Internet coupons,16-25,Crossover Promotions: Loyalty Programs,Also called a continuity or frequency program A promotion to increase customer retention Frequent flyers programs, TGI Fridays “Frequent Fridays
30、” These programs also capture information to use for more targeted promotions and advertising,16-26,Crossover Promotions: Partnership Programs,Comarketing involves manufacturers developing marketing communication programs with their main retail accounts, instead of for them. Cobranding occurs when t
31、wo companies come together to offer a product (e.g., American Airlines, Citibank Visa) With licensing, one company gives another company the right to use its legally protected trademarks and logos on products and in advertising or promotion. Tie-ins are when two companies are displayed, advertised,
32、or promoted together to multiply impact. (e.g., McDonalds Shrek Happy Meals),16-27,Promotion Strategy: Promotion Objectives,Introduce a new product Create brand awareness Brand building Create affinity between brands and buyers Create brand involvement through positive associations,16-28,Promotion S
33、trategy: The Issue of Brand Building,Brand building is long-term and focused on the brands core values, while promotion is short term and price-focused. Critics say price promotions can undermine the brands established values and erode customer brand loyalty. Proponents say promotion can help build
34、brand image. The solution: advertising must be more accountable and promotion more brand-focused; and they must work together.,16-29,Promotion Strategy: Promotion Integration,Advertising and promotion have different strengths that, when combined with other marketing communication tools, can effectiv
35、ely accomplish objectives. Both seek to increase the number of customers and usage of the product by existing customers.,Advertising Creates a brand image over time Relies on emotional appeals Adds tangible value to product or service through image Contributes moderately to short-term profitability,
36、Promotion Creates immediate action Added value strategies rely on rational appeals; impulse appeals use emotion Adds tangible value to product or service Contributes greatly to short-term profitability,16-30,Promotion Strategy: Promotion Effectiveness,Effectiveness is measured by volume, response ra
37、tes, and redemption (coupons, refunds, rebates) rates. Payout planning seeks to produce promotions that increase sales and profits. Promotions can deliver sales but they must be well planned and executed in order to enhance the brands reputation.,Macys Department Store,16-31,The Macys Web site featu
38、res not only a price discount, but also several other deals to encourage store visits.,Visit the Site,Prentice Hall, 2009,Discussion Questions,16-33,Discussion Question 1,Tom Jacksons marketing professor is covering some promotion methods, explaining that in selecting the consumer sales promotion, p
39、lanners must know the brand situation and objectives before techniques are chosen. Some techniques tend to increase product use, and others are used to get new consumers to try the product. “Which methods belong with which objective and why?” the professor asks. How should Tom answer this question?,
40、16-34,Discussion Question 2,Janice Wilcox is a brand manager for a new line of eye cosmetics. She is about to present her planning strategy to division management. Janice knows her company has been successful in using sales promotion plans lately, but she has strong misgivings about following the co
41、mpany trend. “This new line must create a consumer brand franchise, and promotion isnt the best way to do that,” she thinks to herself. How is sales promotion weak in building and maintaining a brand? Should Janice propose no promotion, or is there a reasonable compromise for her to consider?,16-35,
42、Discussion Question 3,Three-minute debate: You have just been named product manager for a new FDA-approved pharmaceutical, a diet pill, that helps reduce hunger. Should you use a push or pull strategy to introduce this new product? Organize into small teams with each team taking one side or the othe
43、r. In class, set up a series of three-minute debates, with each side having half that time to argue its position. Every team of debaters has to present new points not covered in the previous teams presentations until there are no arguments left to present. Then, the class votes as a group on the win
44、ning point of view.,16-36,All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.,Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall,