© 2005 Prentice Hall14-1 Chapter 14 Global Marketing Decisions: Sales Promotion, Personal Selling, Special Forms of Marketing Communication

© 2005 Prentice Hall 14-2 Sales Promotion Sales promotion refers to any paid consumer or trade communication program of limited duration usually aimed at stimulating sales / trials –Price (rebates, discounts, coupons) vs. non- price promotions (sampling, premiums, sweepstakes, contests, etc.) –Consumer vs. trade promotions (increase availability in channel)

© 2005 Prentice Hall 14-3 Sales Promotion Provide a tangible incentive to buyers (lower prices, etc.) Reduce the perceived risk associated with purchasing a product (sampling) Provide accountability for communications activity (results can be tracked) Provide method of collecting additional data for database (forms to be filled in)

© 2005 Prentice Hall 14-4 Sales Promotion: Global or Local In countries with low levels of economic development, low incomes limit the range of promotional tools available –Free samples, demonstrations Market maturity can also be different from country to country –Coupons and sampling in growing markets –Trade allowances and loyalty programs in mature markets

© 2005 Prentice Hall 14-5 Sales Promotion: Global or Local Local perceptions of a particular promotional tool or program can vary –Coupon usage not popular in India Local regulations may rule out use of a particular promotion in certain countries Trade structure in the retailing industry can affect the use of sales promotions –Consolidated retail structures require more trade promotions (USA, Europe) –Fragmented retail structures (India) require less trade promotions

© 2005 Prentice Hall 14-6 Sampling –Provides consumer with opportunity to try product at no cost –May be distributed in stores, in the mail, through print media, at events, or door-to-door –Point-of-use sampling (Starbucks’ chill patrols; Mylanta introduction in India) –Point-of-dirt sampling (Unilever’s Lever 2000 hand wipes in food courts and petting zoos)

© 2005 Prentice Hall 14-7 Couponing –Printed certificates entitle the bearer to a price reduction or some other special consideration for purchasing a particular product Couponing accounts for 70% of consumer promotion spending in the US Free standing inserts, on-pack coupons, in- pack coupons, cross coupons)

© 2005 Prentice Hall 14-8 Couponing Stimulate trial by non-users Operant conditioning of users (Kroger’s 20 cents a gallon price off on gas) Not widely used in Asia since using a coupon is considered a sign of cheapness

© 2005 Prentice Hall 14-9 Couponing

© 2005 Prentice Hall Sales Promotion: Issues and Problems Consumer fraud –Pepsi promotion with Apple Regulations vary by country –Europe regulates promotions heavily Cultural dispositions to coupons and other sales promotions –Malaysia, India see coupon usage as embarrassing –Islam frowns on gambling so sweepstakes may not work

© 2005 Prentice Hall Personal Selling Person-to-person communication between a company representative and potential buyers Focus is to inform and persuade prospect Short-term goal: make a sale Long-term goal: build relationship Buyer and seller may come from different cultural backgrounds

© 2005 Prentice Hall Personal Selling Useful when countries regulate media heavily Japan – comparative advertising is difficult hence product comparisons can be made on a face to face basis Low wage countries – cheaper to build a sales force Issue: host country nationals or expats?

© 2005 Prentice Hall Sales Force Nationality Expatriates Host country Third country Other options

© 2005 Prentice Hall Expatriates Advantages –Superior product knowledge –Demonstrated commitment to service standards –Train for promotion –Greater HQ control Disadvantages –Higher cost –Higher turnover –Cost for language and cross-cultural training Return

© 2005 Prentice Hall Host Country Advantages –Economical –Superior market knowledge –Language skills –Superior cultural knowledge –Implementation quicker Disadvantages –Needs product training –May be held in low esteem –Language skills may not be important –Difficult to ensure loyalty Return

© 2005 Prentice Hall Third Country Advantages –Cultural sensitivity –Language skills –Economical –Allows regional sales coverage Disadvantages –May face identity problems –May be blocked for promotions –Needs product and/or company training –Loyalty not assured Return

© 2005 Prentice Hall Special Forms of Marketing Communications Direct Marketing –Direct mail –Catalogs –Infomercials, Teleshopping Event Sponsorship –Concerts, sporting events –Product placement in movies Internet Communications

© 2005 Prentice Hall Direct Marketing Any communication with a consumer or business recipient that is designed to generate a response in the form of: –An order –Request for further information –A visit to a store or other place of business

© 2005 Prentice Hall Direct Marketing vs. Mass Marketing

© 2005 Prentice Hall One-to-One Marketing Building from Customer Relationship Management –Identify customers and accumulate detailed information about them –Differentiate customers and rank them in terms of their value to the company –Interact with customers and develop more cost efficient and effective forms of interaction –Customize the product/service offered to the customer

© 2005 Prentice Hall Catalogs A magazine style publication that features photographs and extensive information about a company’s products

© 2005 Prentice Hall Product Placements Movies, TV programs, books, etc. Low attributions hence low skepticism Circumvent zipping and zapping Realistic slice-of-life placement Ethically-charged products Fit of the brand with the placement segment and its effect on recall and attitudes Risk of the product being shown in an unfavorable light Joint promotions between the movie and the product Too many placements in a program