Sales Promotion and POP Advertising Chapter 18 with Duane Weaver

Sales Promotion Defined “…the use of incentive techniques that create a perception of greater brand value among consumers, the trade, and business buyers” designed “to create a short-term increase in sales by: 1. motivating trial use, 2. encouraging larger purchases or 3. stimulating repeat sales.” (O’Guinn, Allen, Semenik, p. 649)

Drivers of Sales Promotions Accountability – easier to associate directly with sales results Managers focused on short term Cost-conscious buyer trend battering over- valued brands Brand Clutter – need to support attention toward a specific brand identity. Value driven retailers demanding manufacturer “trade promotions”

Differentiating Trade Promotion from Consumer Promotion Trade Promotions – incentives provided by manufacturers or other distribution channel members to drive initiatives towards the retailer to increase retail stock levels/sales. Consumer Promotions – incentives provided by the retailer to stimulate increases in purchases and/or trials by the consumer.

Objectives for Consumer Promotions Stimulate Trial Purchase Stimulate Repeat Purchase Stimulate Larger Purchase Introduce New Brand Combat/Disrupt Competitors’ Strategies Support IBP or IMC plan

Types of Consumer Promotions Coupons Price-Off Premiums Free premium (give-a-ways) Self-Liquidating premium (consumer pays cost) Advertising specialities (message on useful item to be displayed with no obligation) Contests and Sweepstakes (compete or gamble) Sampling/Trial Offers Gift Cards Rebates Frequency/Loyalty Programs P-O-P (Point-Of-Purchase) Displays

Types of Trade Promotions Incentives Allowances (merchandise allowance, slotting, bill back, amount off-invoice) Training Programs Co-op Advertising

Types of Business Market Promotions Trade Shows Business Gifts Premiums Trial Offers Frequency/Loyalty Programs

Risks of Sales Promotions Price Orientation Created Borrows from Future Sales Alienates Customers (when adjust program – e.g.: airlines miles). Time and Expense – process, cost. Legal Considerations – lottery, contests, gambling…etc.

Discussion Questions Page 668 Question 4 Question 5 Question 6 Question 8 For next class, use any newspaper or magazine that you find over the next week and bring at least 4 samples (each) relative to question 3 to display for the class to view. We will discuss their usefulness and which ones stand out the most and why.