“Using incentives to create a perception of greater brand value”

Consumer Market sales promotion› Induce household consumers to purchase a

firm’s brand Trade-Market sales promotion

› Motivate distributors, wholesalers, and retailers to stock and feature a brand

Business Market sales promotion› Cultivate buyers in large corporations who

make purchase decisions

$300 billion in 2008 Growth rate: 4-8 percent Reasons for growth:

› Demand for accountability› Short-term orientation› Consumer response to

promotions› Proliferation of brands› Increased power of retailers› Media clutter

Short term demand vs. long term demand

Encourages brand switching vs. brand loyalty

Induces trial use vs. encourage repeat

purchase

Promotes price vs. image

Immediate results vs. long term effects

Measurable results vs. difficult to measure

1. Stimulate trial purchase

2. Stimulate repeat purchases

3. Stimulate larger purchases

4. Introduce a new brand

5. Combat or disrupt competitors

6. Contribute to IBP

Push Policy Pull Policy

Information Flow

Consumer Consumer

Retailer

Wholesaler

Producer Producer

Wholesaler

Retailer

Coupons

Price-off deals

Premiums

Contests

Sampling

Sweepstakes

Brand placements

Incentives

Loyalty Programs Trade

Shows

AllowancesGift

Cards

Point of Purchase Displays

1. Coupons 2. Price-off deals

3. Premiums 4. Contests/sweeps

5. Samples & trials 6. Phone gift cards

7. Brand placements 8. Rebates

9. Frequency programs 10.Event sponsorship

Entitles a buyer to a price reduction for a product or service

Advantages› Give a discount to price sensitive

consumer while selling product at full price to others

› Induce brand switching› Timing and distribution can be controlled› Stimulates repeat purchases› Gets regular users to trade up within a

brand array

10

Coupons are the most widely used form of consumer sales promotion.

Coupons are the most widely used form of consumer sales promotion.

Ad in Context Example

Disadvantages› Time of redemption cannot be

controlled› No way to prevent current

customers from redeeming coupons

› Coupon programs require costly administration

› Fraud is a serious, chronic problem

Offers consumer reduced price at point of purchase through specially marked packages

Advantages› Controllable by manufacturer› Can effect positive price

comparisons› Consumers believe it increases

value of a known brand Disadvantage

› Retailers believe it creates inventory and pricing problems

Premiums: free or at a reduced price with another purchase

Free premiums provide item at no cost

Self-liquidating premiums require consumers to pay most of the cost of the item

Advertising specialties:› A message placed on a

free, useful item

14

Premiums attract attention to a brand and offer the consumer something for free.

Premiums attract attention to a brand and offer the consumer something for free.

Ad in Context Example

Contests: consumers compete for prizes based on skill or ability.

Sweepstakes: winners picked by chance

Both create excitement and interest

But . . .› Legal and regulatory requirements are

complex› Consumers may focus on the game

rather than the brand› Difficult to get an IBP message across

in a game

Sampling: Giving consumer an opportunity to use a brand on a trial basis with little or no risk

Types of sampling› In-store(Costco) – Newspaper› Door-to-door – On-package› Mail – Mobile (on-site)

Trial offers› Used for more expensive items› Consumer tries product for a fixed

time

Manufacturers offer either for free or for purchase debit cards› with phone time› or preset spending limits

Examples include offers from Starbucks, Barnes & Noble, and The Gap

Money back offer requiring the buyer to mail a request for money back from the manufacturer

Often tied to multiple purchases

Many consumers fail to bother sending in the rebate request form

Also known as continuity programs

Offers customers discounts or free products for repeat patronage

Common in airline, hotel, and restaurant businesses

Objectives: Uses a “push” strategy: Push the product into the distribution channel to the consumer:–Obtain initial distribution– Increase order size–Encourage cooperation with

consumer market sales promotions– Increase store traffic

Incentives: Push money Allowances: Merchandise allowances,

slotting fees, bill- back allowances, off-invoice allowances

Sales Training Programs Cooperative (Co-Op) Advertising

Trade Shows

Business gifts

Premiums and advertising

specialties

Trial offers

Frequency programs

23

Trial offers are very effective in the business market. Why?

Trial offers are very effective in the business market. Why?

Ad in Context Example

Create a price orientation

Borrow from future sales

Alienate loyal customers

Time and expense

Legal considerations

Definition› Materials used in the retail setting to attract

shoppers’ attention to a brand, to convey primary product benefits, or highlight pricing information.

› Displays may feature “price-off” deals as well.

Objectives for Point-of-Purchase Advertising› Draw consumers’ attention to a brand in the

retail setting.› Maintain purchase loyalty among brand loyal

users.› Stimulate increased or varied usage of the

brand.› Stimulate trial use by users of competitive

brands.

Product displays and information sheets encourage retailers to support one distributor or manufacturer’s brand over another.

P-O-P promotions can help win precious shelf space and exposure in a retail setting.

A P-O-P display should be designed to draw attention to a brand, increase turnover, and possibly distribute coupons or sweepstakes entry forms.

To combat losing business to online shopping, retailers are trying to enliven the retail environment, and point-of-purchase displays are one strategy.

Purpose: To reinforce or extend a message being delivered through other media

› Signs, billboards, posters

› Transit

› Aerial

› Specialty

› Directory

Advantages› Wide local

exposure› Captivating› Around-the-

clock exposure› Address an

immediate need or desire

Disadvantages– Message limits– Location affects

impact– Relatively

expensive– Criticized by

environmental groups

Transit Ads› Urban environments› Demographic

segmentation› Timely to purchase› Build brand

awareness

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Transit ads can reach a target audience in well defined geographic areas.

Transit ads can reach a target audience in well defined geographic areas.

Ad in Context Example

Aerial Ads– Blimps increasingly

common– Common at sporting

events– Skies are getting

crowded!– Networks are in

control

Advantages› High

acceptance› High availability› Final link to

purchase

Disadvantages– Too many

directories– Long lead

times– Limited

creativity New: CD-ROM and Web-based directories

33

Web based directories offer convenience and speed.

Web based directories offer convenience and speed.

Ad in Context Example

Promotional Benefits of Packaging to the Advertiser:

– The package carries the brand name and logo

– The package can communicate “value”

– The package can communicate “image” and “quality”

Packaging highlights the brand name, quality and image.

Packaging highlights the brand name, quality and image.

Ad in Context Example

Guerrilla Marketing—”Stunt” promotions

Viral campaigns—Using influencers (Chapter 20)

Special Events—Creating visibility and “affinity” for a brand among a highly select target group