Chapter 17 Promotional Concepts and Strategies1  Sales Promotion – notes  Begin Promotional Plan Project MARKETING November 6, 2015

Chapter 17 Promotional Concepts and Strategies2  Sales promotions are short-term incentives offered to encourage buying a good or service.  Sales promotions encourage customers to try new products, build awareness, increase purchases or reward loyalty.  Sales promotions are usually supported by advertising activities that include trade promotions and consumer promotions Sales Promotion

Chapter 17 Promotional Concepts and Strategies3 Trade Promotions  Trade promotions are sales promotion activities designed to get support for a product from manufacturers, wholesalers, and retailers.  More money is actually spent on promoting to businesses than to consumers.  Good business ethics require that trade promotional payments and awards be offered in a uniform manner. Slide 1 of 3

Chapter 17 Promotional Concepts and Strategies4 Trade Promotions  Promotional allowances are cash payments or discounts given by manufacturers to wholesalers or retailers for performing activities to encourage sales  Example: Offer a discount to stock a large quantity of product  Slotting allowances are cash premiums paid by the manufacturer to a retail chain for the costs involved in placing a new product on its shelves (buying shelf space), pay for a retailer’s discount specials on a product, store advertising, and display costs Slide 2 of 3

Chapter 17 Promotional Concepts and Strategies5 Trade Promotions  Cooperative advertising is when a manufacturer supports the retailer by helping pay for the cost of advertising the product locally  Sales force promotions are awards given to managers and employees who successfully meet or exceed sales quotas  Trade shows and conventions are events at which businesses can showcase new products, encourage increased sales of existing products, meet customers and partners in the distribution chain, and gain continued company and product support

Chapter 17 Promotional Concepts and Strategies6 Trade Promotions – Trade Shows Slide3 of 3

Chapter 17 Promotional Concepts and Strategies7 Sales promotions are sales strategies designed to encourage customers to buy a product or service Consumer Sales Promotions

Chapter 17 Promotional Concepts and Strategies8 Coupons are certificates that entitle customers to cash discounts on goods or services. Current trend is a push to online printing of coupons. Coupons Slide 2 of 3

Chapter 17 Promotional Concepts and Strategies9 Premiums or giveaways are low-cost items given to consumers at a discount or for free.  Designed to increase product loyalty or attract new customers.  People are more likely to buy a product when offered an added-value gift in exchange. Premiums Slide 1 of 3

Chapter 17 Promotional Concepts and Strategies10  Factory packs – free gifts placed in product packages or as a container premium Premiums - Examples Slide 1 of 3

Chapter 17 Promotional Concepts and Strategies11 Traffic builders are low-cost premiums such as pens, key chains, calendars or coffee mugs given away free to consumers for visiting a new store or attending an event. Premiums - Examples Slide 3 of 3

Chapter 17 Promotional Concepts and Strategies12 Coupon plans are ongoing programs offering a variety of premiums in exchange for labels, coupons, or other tokens. Premiums - Examples Slide 3 of 3

Chapter 17 Promotional Concepts and Strategies13 Incentives generally are higher-priced products earned and given through contests (games of skill) and sweepstakes (games of chance) Businesses use incentives to promote many products because they create customer excitement and increase sales. Incentives

Chapter 17 Promotional Concepts and Strategies14 Deals or price packs offer short-term price reductions that are marked directly on the label or package. Example: T-shirts $10 each or $6 each for two or more A deal may also bundle two or more related items together. Deals

Chapter 17 Promotional Concepts and Strategies15 A product sample is a free trial size of a product sent through the mail, distributed door-to-door, or given away at retail stores and trade shows. Detergents, toothpastes, shampoos, deodorants, and colognes are frequently promoted this way. Drug manufacturers give samples to doctors. Product Samples

Chapter 17 Promotional Concepts and Strategies16 Sponsoring company pays a fee for the right to promote itself and its products at a specific location (site, event, group, or person). Title sponsor: pays to have its name in the name of the sponsored location (Pepsi Center or Sports Authority Field). Sponsorship

Chapter 17 Promotional Concepts and Strategies17 Promotional tie-ins (aka cross-promotion and cross-selling) involve coordinated sales promotional arrangements between two or more retailers or manufacturers. Example: For the promotion of The Wizard of Oz movie, Warner Brothers coordinated with McDonald's which made a special Happy Meal with a Madame Alexander Toy. Promotional Tie-Ins

Chapter 17 Promotional Concepts and Strategies18 With product placement, an organization can develop product recognition by making sure that a product is featured in special events, on television, or in the movies.product placement Product Placement

Chapter 17 Promotional Concepts and Strategies19 Loyalty marketing programs, also called frequent buyer programs, reward customers for making multiple purchases. Loyalty marketing was popularized in the 1980s by the airline industry, which instituted frequent flyer programs. Loyalty Marketing Programs

Chapter 17 Promotional Concepts and Strategies20 Point-of-Purchase Displays are displays designed primarily by manufacturers to hold and display their products. Usually placed in high traffic areas to promote impulse purchases. Point-of-Purchase Displays

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