Lecture Advertising and promotion – Chapter 16: Sales promotion

Chapter 16 - Sales promotion. The goals of this chapter are: To understand the role of sales promotion in a company’s integrated marketing communication program and to examine why it is increasingly important, to examine the various objectives of sales promotion programs, to examine the types of consumer- and trade-oriented sales promotion tools and the factors to consider in using them,...

Chapter 16 Sales promotion Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-1 Learning objectives To understand the role of sales promotion in a company’s integrated marketing communication program and to examine why it is increasingly important To examine the various objectives of sales promotion programs To examine the types of consumer- and tradeoriented sales promotion tools and the factors to consider in using them To consider potential problems and abuse by companies in their use of sales promotion Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-2 Sales promotion abuse Scope and role Objectives Trade-oriented sales promotion Sales promotion Growth of sales promotion Techniques Consumer-oriented sales promotion Objectives Techniques Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-3 Australia’s national dish Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-4 Sales promotion A A direct direct inducement inducement that that offers offers an an extra extra value value or or incentive incentive for for the the product product to to the the sales sales force, force, distributors, distributors, or or the the ultimate ultimate consumer consumer with with the the primary primary objective objective of of creating creating an an immediate immediate sale sale An An extra extra incentive incentive to to buy buy A A tool tool to to speed speed up up sales sales Targeted Targeted to to different different parties parties Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-5 Scope of sales promotion Sales Sales promotion promotion can can be be targeted targeted at… at… Retailers Retailers Trade-oriented Trade-oriented sales sales promotion promotion Consumers Consumers Consumer-oriented Consumer-oriented sales sales promotion promotion Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-6 Sales promotion vehicles Consumer-oriented Samples Samples Coupons Coupons Premiums Premiums Trade-oriented Contests, Contests, dealer dealer incentives incentives Trade Trade allowances allowances Contests/sweepstakes Contests/sweepstakes Point-of-purchase Point-of-purchase displays displays Refunds/rebates Refunds/rebates Training Training programs programs Bonus packs Bonus packs Trade Trade shows shows Price-off Price-off deals deals Cooperative Cooperative advertising advertising Loyalty Loyalty programs programs Event Event marketing marketing Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-7 Sony lives an innovative sales promotion Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-8 Sales promotion for a tourist destination Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-9 Sales promotion abuse Scope and role Objectives Trade-oriented sales promotion Sales promotion Growth of sales promotion Techniques Consumer-oriented sales promotion Objectives Techniques Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-10 McDonald’s Happy Meals Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-29 Contests and sweepstakes Contest: Contest: aa promotion promotion where where consumers consumers compete compete for for prizes prizes or or money money on on the the basis basis of of skills skills or or ability ability Winners Winners are are determined determined by by judging judging entries entries or or ascertaining ascertaining which which entry entry comes comes closest closest to to some some predetermined predetermined criteria criteria Sweepstakes/games: Sweepstakes/games: aa promotion promotion where where winners winners are are determined determined purely purely by by chance chance and and cannot cannot require require aa proof proof of of purchase purchase as as aa condition condition for for entry entry Winners Winners are are chosen chosen by by random random selection selection from from aa pool pool of of entries entries or or generation generation of of aa number number to to match match those those held held by by game game entrants entrants Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-30 Problems with contests and sweepstakes Do Do not not contribute contribute to to brand brand building building Problems Problems Focus Focus not not on on brand brand Effectiveness Effectiveness Legal Legal considerations considerations May May generate generate negative negative publicity publicity Use Use by by professionals professionals or or hobbyists hobbyists Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-31 Strategies for improved return on promotions Offer a popular grand prize Ensure that there is a good perceived chance of winning Give more than one prize Have intermittent prize draws Make it easy to participate Make it easy to understand Give instant gratification Give prizes of interest Communicate effectively 10 Focus on the promotion, not the brand Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-32 Other popular consumer sales promotion tools Bonus Bonus packs packs Refunds Refunds and and rebates rebates Other Other promotional promotional tools tools Event Event marketing marketing Price-off Price-off deals deals Frequency/ Frequency/ loyalty loyalty programs programs Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-33 Loyalty programs Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-34 Event marketing Event Event marketing: marketing: promotion promotion where where aa company company or or brand brand is is linked linked to to an an event event or or where where aa themed themed activity activity is is developed developed for for the the purpose purpose of of creating creating experiences experiences for for consumers consumers and and promoting promoting aa product product or or service service Event Event sponsorship: sponsorship: an an IMC IMC activity activity where where aa company company develops develops actual actual sponsorship sponsorship relations relations with with aa particular particular event event and and provides provides financial financial support support in in return return for for the the right right to to display display aa brand brand name, name, logo logo or or advertising advertising message message and and be be identified identified as as aa supporter supporter of of the the event event Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-35 Summary of consumer-oriented promotions and market objectives Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-36 Sales promotion abuse Scope and role Objectives Trade-oriented sales promotion Sales promotion Growth of sales promotion Techniques Consumer-oriented sales promotion Objectives Techniques Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-37 Trade-oriented sales promotion objectives Obtain Obtain distribution distribution of of new new products products Maintain Maintain trade trade support support for for existing existing products products Objectives Objectives Build Build retail retail inventories inventories Encourage Encourage retailers retailers to to display display existing existing brands brands Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-38 Types of trade-oriented promotions Contests Contests and and incentives incentives Trade Trade allowances allowances Buying  Buying  Buying allowances Buying allowances Allowances Allowances Point-of-purchase Point-of-purchase displays displays Sales Sales training training programs programs Trade Trade shows shows Promotional  Promotional Promotional  Promotional Allowances allowances Allowances allowances Slotting Slotting  Slotting Slotting  allowances Allowances allowances Allowances Cooperative Cooperative advertising advertising Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-39 Types of trade promotion Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-40 Types of cooperative advertising Ingredientsponsored coop advertising Horizontal cooperative advertising Cooperative Cooperative advertising advertising Vertical cooperative advertising Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-41 The sales promotion trap Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-42 Summary and conclusions  Over the past two decades, marketers have been allocating increased share of promotional budget to sales promotion  Sales promotion techniques can be:  consumer oriented  trade oriented  Sales promotion techniques include sampling, coupons, premiums, competitions, rebates and refunds  Sales promotion abuse can occur when marketers become overly dependent on sales promotion techniques at the expense of building long-term brand position, brand equity and customer relationships Copyright 2012 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-43 ... Powell 16-5 Scope of sales promotion Sales Sales promotion promotion can can be be targeted targeted at… at… Retailers Retailers Trade-oriented Trade-oriented sales sales promotion promotion Consumers... Advertising and Promotion 2e by Belch, Belch, Kerr & Powell 16-2 Sales promotion abuse Scope and role Objectives Trade-oriented sales promotion Sales promotion Growth of sales promotion Techniques... promotion abuse Scope and role Objectives Trade-oriented sales promotion Sales promotion Growth of sales promotion Techniques Consumer-oriented sales promotion Objectives Techniques Copyright 2012 McGraw-Hill