Chapter 14 Sales Promotion Kleppner’s Advertising Procedure, 18e Lane * King * Reichart

Learning Objectives Discuss the complementary roles of sales promotion and advertising. Discuss the general forms of promotion available to marketers. Explain the basic approaches to product association and tie-ins Discuss the varied types of couponing today. Discuss the uses of sales promotion consumer and trade incentives. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Pros of Sales Promotions Encourages consumer sales response Extremely flexible with a number of techniques to reach consumers across demographic and lifestyle categories Functions at both consumer and trade levels to encourage high levels of distribution and goodwill Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Cons of Sales Promotions Can damage brand equity by replacing image of product with price competition Care must be taken to coordinate various messages Some forms, like couponing, do not provide a competitive source of differentiation Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Sales Promotion Sales promotions are sales activities that supplement both personal selling and marketing, coordinating the two, and helping to make them effective. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Promotional Categories Transactional Relational Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Exhibit 14.3 The Consumer Communication and Purchase Process Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Possible Promotional Objectives To gain trial among nonusers of a brand or service To increase repeat purchase and/or multiple purchases To expand brand usage To defend share against competitors To support and reinforce an advertising campaign To increase distribution Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Factors to Consider When Developing Promotional Strategy Customer attitudes and buying behaviors Brand strategy Competitive strategy Advertising strategy Trade environment Other external factors Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Forms of Sales Promotion Event marketing Virtual advertising Sponsorships Point-of-purchase advertising Premiums and incentives Interactive/digital Product sampling Sweepstakes and contests Cooperative advertising Trade shows and exhibits Directories and yellow pages Trade incentives Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Event Marketing Corporate sponsorship Staged promotions Product licensing Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Point-of-Purchase Advertising Motivates unplanned shopping Offers brand and product reminders Influences brand switching Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Premiums Premiums are items other than the product itself given to purchasers of a product as an inducement to buy. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Types of Premiums Traffic-building Continuity In- or on-pack Self-liquidating Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Reasons for Using Specialties To promote customer retention and appreciation To use with trade shows To build goodwill and enhance image To create awareness of new products To generate sales leads and responses Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Exhibit 14.7 FSI Delivers Coupons Coupons are the most popular form of sales promotion. Free-standing inserts are a common form of coupon distribution. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Sampling Sampling is the free distribution of a product to a prospect. Experiential sampling incorporates sampling with a consumer engagement device (like Hershey’s KISSMOBILE). Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Growth in Sampling Newspaper distribution Event marketing In-store sampling In-pack/co-op programs Internet sampling Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Sweepstakes and Contests Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Cooperative Advertising National firm pays 50% of cost for most co-op advertising; some at 100% National manufacturers build goodwill with retailers; encourage local support of brands; and, qualify for lower local rates, especially in newspapers Manufacturers also gain a positive association between local retailers and their products, and enhance brand equity Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Types of Cooperative Advertising Vendor programs Ingredient manufacturer co-op Manufacturer-to-wholesaler co-op Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Trade Shows There are all types of trade shows! Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Forms of Trade Incentives Dealer incentives Sales incentives Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

For Discussion What is the primary disadvantage of sales promotion? What are the major advantages and disadvantages of event marketing? Why is point-of-purchase advertising so important to many advertisers? Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall