Sales Promotion What is SALES PROMOTION? Anything…all activities…other that Advertising, Publicity and Personal Selling used to stimulate sales or increase a corporate image.

Sales Promotion Sales Promotion is either: business oriented (selling goods to wholesalers, retailers or other businesses) Trade Promotions customer oriented (promote sales from the retail market) Consumer Sales Promotions Trade Promotions (business-to-business) Consumer Sales Promotion (retail customers)

Trade Promotion (Business) Activities designed to gain support (resell) from businesses (other manufacturers, wholesalers, retailers) Slotting Allowances Buying Allowances (or Promotional Allowances) Cooperative Advertising Trade Shows / Conventions Sales Incentives

Trade Promotions (Business) SLOTTING ALLOWANCES Manufacturers pay retailers to get their products on the shelves. Ex. Kit-Kat comes out with a new Mocha flavored candy. It pays Meijer $5000 to place the candy on end-caps in each of their Michigan Stores.

Trade Promotion (Business) BUYING ALLOWANCES also called Promotional Allowances A quantity discount given to businesses to get them to buy more goods. (If the business gets a discount, they make more profit per piece sold) Kraft takes 2% off the price of Macaroni and Cheese if Kroger purchases 500 boxes per store.

Trade Promotion (Business) COOPERATIVE ADVERTISING A manufacturer supports the retailer by helping to pay for the local advertising. EX. Discount Tire may get reimbursed by Michelin to use their tire in a local television ad in Michigan

Trade Promotion (Business) SALES INCENTIVES Prizes and money given by manufacturers to managers and employees for selling a certain amount of goods. If Chuck, from Heidebrecht Chevrolet sells 60 cars this quarter, he will win a trip to Cawker City, Kansas, the home of the world’s largest ball of twine.

Trade Promotions (Business) TRADE SHOWS / CONVETIONS An event where manufacturers get together to display their goods for wholesalers, retailers, and consumers to see new and existing products. Doctors fly to Paradise Island in the Bahamas for a week to see new drugs and medicines on display from various pharmaceutical companies

CONSUMER SALES PROMOTIONS

Consumer Sales Promotion Activities designed to generate sales from retail customers (end users). Coupons Premiums Product Samples Licensing Product Placement Visual Merchandising and POP Displays Deals Incentives Sponsorships Promotional Tie-Ins Loyalty Programs

Consumer Sales Promotions COUPONS Certificates that entitles customers to cash discounts

Consumer Sales Promotions DEALS Short term price reductions marked directly on the label or package. Many times, two similar products bound together for the price of one (same company) Bausch & Lomb’s Renu contact lens cleaner and its multipurpose wetting solution.

Consumer Sales Promotions PREMIUMS Low-cost giveaways to customers. People will be motivated if they are offered a gift. Factory Packs - Free gifts in the package Traffic Builders - Giveaways for visiting or purch Coupon Plans - Collect labels for free stuff

Consumer Sales Promotions INCENTIVE Higher-priced give-aways through contests, sweepstakes, and rebates Contests or sweepstakes to win scholarships, vacations, money…or Rebates (discount) offered by manufacturer when you purchase an item (car, appliance, etc)

Consumer Sales Promotions PRODUCT SAMPLE Free trial size of a product sent through the mail, door-to-door, or given at retail stores or trade shows.

Consumer Sales Promotions SPONSORSHIP Company pays a fee to promote itself (or product) at an event or location. “Comerica Park” or McDonald’s being the official sponsor of the Olympic games.

Consumer Sales Promotions LICENSING Companies will sell the rights to use a logo, character, name, etc., to other businesses. Judas Priest sold the rights to “Hellion” to Honda for use in their Honda Odyssey ad campaign.

Consumer Sales Promotions PROMOTIONAL TIE-INS Multiple companies pool their resources to do promotions together. Taco Bell and 20th Century Fox teamed together to promote the movie Star Wars.

Consumer Sales Promotions PRODUCT PLACEMENT Using a brand name product in a movie, TV show, sporting event or even in a commercial for another product. Wayne’s World product placements

Consumer Sales Promotions LOYALTY PROGRAMS Frequent buyer programs reward customers for patronizing a company Airline frequent flier programs.

Consumer Sales Promotions VISUAL MERCHANDISING / DISPLAYS In store promotion with physical merchandise and exhibits usually placed in high traffic areas or windows Point of Purchase Display