16

Sales Promotion

McGraw-Hill/Irwin Copyright © 2012 McGraw-Hill Companies, Inc., All right reversed

 Sales Promotion

A direct inducement that offers

an extra value or incentive for
the product to the sales force,
distributors, or ultimate consumer
with the primary objective of
creating an immediate sale

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 Sales Promotion Vehicles
Consumer-Oriented Trade-Oriented
Samples Contests, incentives

Coupons Trade allowances

Premiums POP displays

Contests/sweepstakes Sales training programs

Refunds/rebates Trade shows

Bonus Packs Cooperative advertising

Price-off deals

Frequency programs

Event marketing
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Reasons for Sales Promotion Increases

Growing power of retailers

Declining brand loyalty
Increased promotional sensitivity
Brand proliferation
Fragmented consumer markets
Short-term focus of marketers
Increased accountability
Competition
Clutter
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 Sale Promotion Concerns

• Negative impact of sales promotions

• Fewer dollars to build brand equity
• Encourages consumers to purchase on the
basis of price
• Detracts from the value of the brand
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Objectives of Consumer-Oriented Promotions

Increase
consumption of an
established brand

Obtain trial Defend (maintain)

and purchase current customers

Enhance IMC
Target a
efforts and build
specific segment
brand equity

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 Sampling

Sampling Works Best When

The product
can be broken
The products into a small The purchase
are of piece or size cycle is
relatively low that reflects relatively
unit value the full short
features and
benefits

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 Pros and Cons of Coupons

Advantages Disadvantages
Appeals to price Hard to tell how many
sensitive consumers consumers will use
them and when
Can offer discounts
without retailer Often used by loyal
cooperation consumers who would
purchase anyway
Effective way to induce
trial of products Low redemption rates
and high costs
Defends market share
and encourages Misredemption
repurchase and fraud
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 Types of Coupons

In/On-Pack In-Store

Bounce-back Tear-off pads

Cross-ruff Handouts

Instant Dispensers

Register printout

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 Premiums

An offer of an item, merchandise, or

service, free or at a low cost, that is
an extra incentive for customers

Types of Premiums

Self-liquidating:
Free:
consumer required to
Only requires purchase
pay some or all of the
of the product
cost of the premium

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More Consumer-Oriented Promotions

Price-off Deals

Contests and
sweepstakes

Refunds and
rebates

Bonus packs

Loyalty programs

Event marketing

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 Trade Oriented Promotions

Obtain distribution for new

products
Objectives
Maintain support for
established brands

Encourage display of
products

Build retail inventories

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Types of Trade Oriented Promotions

Contests and incentives

Co-op Advertising
Types
Trade allowances

POP displays Buying

Sales training Promotional

Trade shows
Slotting

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 Cooperative Advertising

• Trade-oriented cooperative advertising

• The cost of advertising is shared by more
than one party
• Forms
• Horizontal
• Ingredient-sponsored
• Vertical

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The Sales Promotion Trap

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