Sales Promotion, Events, and Sponsorships Part 5: Integration and Evaluation Chapter 16 Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Key Points Explain the principles that drive the use of sales promotion List and explain the use of various consumer promotions Summarize the types and purposes of trade promotions Describe the use of other types of promotions Explain the strategic use of promotions in marketing Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Marketing Mix Strategies Product designs, Branding, Maintenance, Packaging product price Cost, Profit, Value expectation place Wholesaler, Retailer, Transporter, Intermediary promotion Advertising Public relations, Sales promotion, Personal selling, Direct marketing, Packaging Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

The Practice of Sales Promotion A marketing discipline that utilizes a variety of incentive techniques to structure sales-related programs that generate a specific, measurable action or response Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Why Sales promotion? Company Side Consumer Side -Consumer behavior: expect the short term price reduction -Pricing: reduce the risk of purchase -Parity products :increasing sales when products are largely undifferentiating e.g. mass product -Power of the retailer: dominant retailers demand incentives to offer shelf space Need for short-term profit Easy to evaluate the impact (from sales volume) High cost of Media Market share: battle for market share instead of product growth Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Result Sales promotion: cost less, produce immediate results (short-term sales) Consumer: Risk Value added (more for less) Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Types of Sales promotion Consumer Sales promotion is a promotion aim at ultimate consumers of products Trade Sales promotion is a value added program directed at trade members (reseller) Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Consumer Promotions Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Price Deals - Cents-off: Reduce prices e.g. 20% discount, 50 % discount Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Price Deals Price–pack deals: offer additional quantities of the product being purchased or provide the consumer with something extra Ex: buy two get one free Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Price Deals Bonus pack: offer additional amount of the product being purchased but contain in the packaging Ex: 25%more in this bottle of ketchup” Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Price Deals Banned pack: more units of a product sold at a lower price than if they were bought a the regular singular unit price e.g Mama, toothpaste, soap Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Coupon Coupon: are small written contracts that grant holders a price reduction within time frame 1) Retailer-sponsored coupons: redeemable only at the specified outlet 2) Manufacturer-sponsored coupons: redeemable at any outlet (distributor) Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Refund and Rebate Refund and rebate: Offer to return the certain amount of money to the consumer Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Consumer Promotion Sampling: Allow the consumer to try the sample of the product Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Consumer Promotion Contest: Engage consumers who compete for prizes based on skill or ability based on skills or talent Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Consumer Promotions Sweepstakes: Award prizes to consumers. Based on luck or chance of selection Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Consumer Promotions Specialties items: Give- away items as a reminder for the brand Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Consumer Promotion Premium: an extra product or tangible reward for consumer’s particular behaviors usually purchase 1. Direct premium award given at the time of purchase -- Store premiums: given to customers at the retail site e.g premium at 7elevent, department store -- In-pack premiums are inserted in the package at the factory e.g toys inside the snack package -- On-pack premiums are placed outside the package e.g detergent with brush -- Container premiums in which the package is the premium e.g. S&P cookie box 2. Mail premium are sent to consumers after they meet certain requirement. --Self-liquidation programs is a payment be mailed in along with some proof of purchase before the customer receives the premium -- the customers save the coupons or special labels attached to the product that can be redeemed for merchandise Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Premium Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Other Types of Premium Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Exercise: identify types of sales promotion Top Shop offers “Buy 2 Get 1 free” promotion for T-shirts Herbal Essence shampoo gives more 50% in quantity at the same price Berman toothpastes are sold in a pack of 3 at discount price Latest Ovaltincampaign requires the Ovaltin consumers to return the Ovaltin package with their names for lucky draw. It offers many valuable prizes. 7 Eleven offers ‘Kitty pillow’ for the purchase of more than 100 baht +pay more 20 baht. Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Consumer Sales Promotion Objective VS Types Specialty Ad Awareness Trial Maintain & Increase Market Share Brand Reminder - Special Event Sponsorship Point-of-purchase -Special Event Sampling Price deal e.g. Cent off -Coupon -coupon -premium -special event -contest -sweepstake -Price Deals Specialty items Use Advertising to support each objective Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Trade Sales Promotion Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Trade Sales promotion Goal -Designed by manufacturer to get cooperation of people in distribution channel (trade member) -Encourage the promotion of product to the consumer -gauged from sales volume Target: Resellers (wholesaler, retailer) 2 Roles: Trade support: to stimulate in-store merchandising, superior store location, shelf space Excitement: to create the high level of attention from resellers about the product sales Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Types of trade Sales promotion Point-of-purchase (POP) display: Manufacturer-designed display distributed to retailers to get attention from the customers Example: Special rack, display carton, banner, sticker, signs, price card, etc. - Retailer (dealer) kits: Materials and information to help retailer sell ability such as price information, product specification, product display instruction, etc. Contest and sweepstakes: can motivate resellers (increase relationship) - Trade shows and exhibition: provide opportunities to exchange information, demonstrate and sample products and sell merchandise (usu. same industry) Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice POP Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Types of trade promotion (contd.) Trade incentive and deals: Reward for purchasing at the certain amount of product. -- Bonuses (push money, spiff): monetary bonus paid to store’s salesperson based on the units that salesperson sells over a period of time -- Dealer loaders are premiums (=consumer premium) a manufacturer gives to a retailer for buying a certain amount of product e.g. free trip, --allowances: is a price reducing and reward program for trade to purchase in a certain amount of product (discount) -- advertising allowance: the manufacturer pays the resellers a certain amount of money to advertise the manufacturer’s product (flat amount or percentage according to the gross purchase) -- Cooperative ads.: contractual arrangement between manufacturer and resellers, the manufacturer agrees to pay a part or all ad expenses incurred by the resellers. -- display allowances: direct payment of cash or goods is given to the resellers if the resellers agree to set up the point-of-purchase (POP) Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Consumer Sales Promotion Objective VS Types Attention Motivation Information & Trial Point-of-purchase (trade and consumer) -Trade deals -contest -prize -Trade Show& Exhibition -Retailer (Dealer ) Kits Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Promotions that Across the lines Awareness+sales Sponsorship: Company supports an event either financially or by donating supplies and services e.g. Olympics, golf tournament Event marketing: Building product marketing’s program around a sponsored event. Practice of linking a brand to an event that usually matches the brand to the target market’s lifestyle e.g. Nokia (Lamour) + Fashion Week Aerial advertising support: Balloon, Giant model, etc. Loyalty Program (loyalty program or continuity program): is a promotion to increase customer retention In order to keep and reward the continued patronage e.g. member card, airline frequent flier program ( Higher purchase Greater benefits ) Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice SPONSORSHIPS Pepsi was a sponsor for Concert of Black Eyed Peas Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice 31

Mc Donald’s Aerial Advertising Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Starbucks Gold Membership Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Promotions that Across the lines Partnership programs: Co-marketing: Manufacturer and retailer develop a marketing communication program together e.g. P&G with Tesco Lotus Co-Branding: Two companies come togather to offer the product e.g. Credit card co. with restaurants, hotels, spa (both get brand equity) Licensing agreements (rents): A company’s legal permission for other manufacturers to use their company’s logos, symbols, trade characters, identities for or use on other product e.g. Waltz Disney products (the co. gets the money + extend the brand) Tie-ins: associate complementary brands linking two complementary products in a promotion e.g. McDonald & Walz Disney ( 2 products joined  bigger impact ,  share the advertising cost) Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice CO-MAR KETING Drink Pepsi has a chance to win Yamaha Meo ZR when buy pepsi product up to 500 bath receive 1 coupon compete for the prize. Only at Makro Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice 35

ADVERTISING Principles and Effective IMC Practice O U P N CO-BRANDING DISCOUNT 10% For Zoo Park DISCOUNT 20% For Park DISCOUNT 10% For Fun Park DISCOUNT 50% For Alangran Theater DISCOUNT 20% For Mini Siam DISCOUNT 20 bath For Crocodile Farm Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice 36

ADVERTISING Principles and Effective IMC Practice A limited collection MAC Hello Kitty by US. MAC Cosmetics and Japanese company Sanrio have teamed up to create MAC Hello Kitty Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Marketing Mix Strategies (contd.) PLACE (DISTRIBUTION): Have mechanism for delivering and servicing the product and receive payment -- Market Coverage Strategy: geographic distribution eg. BKK, nationwide --Push Strategy: direct marketing efforts at reseller (many channels) Pull Strategy: direct marketing efforts at consumer (create demand) Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

Push, Pull, and Combination Strategies Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice

ADVERTISING Principles and Effective IMC Practice Activity Each pair gives one example of consumer sales promotion Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice