Chapter 15 IMC: Sales Promotion, Public Relations, Experiential Marketing and Personal Selling Copyright © 2013 Pearson Canada Inc.

Sales Promotion Copyright © 2013 Pearson Canada Inc.15-2 There are two principle kinds of sales promotion: Consumer Promotion Activity promoting extra brand sales by offering the consumer an incentive over and above the product’s inherent benefits. Trade Promotion Promotional activity directed at distributors that is designed to increase sales volume and encourage merchandising support for a manufacturer’s product. “Activity that provides special incentives to bring about immediate action from consumers, distributors, and the organization’s sales force.”

Consumer Promotion Incentives offered consumers to prompt extra brand sales. The incentives are part of a “pull” strategy used at point-of-sale. ManufacturerWholesalerRetailerConsumer Promotion Objectives Trial purchase Repeat purchases (loyalty) Multiple purchases Competitive Defense 15-3Copyright © 2013 Pearson Canada Inc. Consider stage of Product Life Cycle

Consumer Promotion Activities Copyright © 2013 Pearson Canada Inc.15-4 Marketers have many good options available to stimulate brand sales. Free Samples-Free product distributed to potential users in trial sizes or regular sizes; an effective strategy when launching a new product. Coupons Temporary Price Reductions Contests Cash Refunds and Rebates Premiums Loyalty (Frequent Buyer) Programs

Samples-Why? Objective: Trial Reduce the risk –Think about the risks involved in trying a new product

Media-Delivered Coupons Product-Delivered Coupons COUPONS “Immediate price-saving incentives to motivate immediate purchase of a specific product.”

Coupons-Why? Media Delivered Objective: Trial useful in introduction and growth stages. Direct mail, print media and online delivery of coupons Product Delivered Objective: Loyalty useful in late growth and mature stages. In-pack and on-pack delivery of coupons

Contests Copyright © 2013 Pearson Canada Inc.15-8 Activity that generates short-term excitement for a brand. Sweepstakes Instant Wins Send in or enter online for a grand prize and secondary prizes. Pre-selected winning tickets from a fixed ticket universe. Advertising support is necessary to create awareness and interest in the contest.

Contests Copyright © 2013 Pearson Canada Inc.15-9

Contests - Why? Objective: Loyalty Later stages of Product Life Cycle Contests add value. –More benefit. Something more for the money. Shows appreciation for the relationship and creates loyalty –Customers see loyalty as a two way street…

Premium Offers Copyright © 2013 Pearson Canada Inc “An item offered for free or at a bargain price with the purchase of a product.” Attaching a sample size product Free item inside a package Giveaways with fast food meals. A good premium differentiates a brand at a critical time and place…add value at the point-of-sale. Think Buying Process

Premium Offers – Why? Copyright © 2013 Pearson Canada Inc Objective: Various A good premium differentiates a brand at a critical time and place…add value at the point-of-sale. Think Consumer Decision-Making Process

Loyalty Programs Copyright © 2013 Pearson Canada Inc.15-13

Loyalty Programs An accumulated reward system (points, money, miles, etc.) offered for a customer’s ongoing patronage. Almost three-quarters of Canadians have a loyalty card in their wallet or purse. Why?-62% of consumers think that loyalty programs make them more likely to continue doing business with a particular company. Nearly one-half of consumers agree that loyalty programs cause them to modify when and where they shop to maximize benefit 39% modify brands purchased to maximize loyalty benefits. Rob Daniel, VP Research and Loyalty at Maritz, shares highlights from Maritz Insights: The Loyalty Report

Cash Refund (Rebate) Copyright © 2013 Pearson Canada Inc A predetermined amount of money returned directly to consumers by the manufacturer after a purchase has been made. Push/Pull Manufacturer’s of brand name appliances offer rebates to stimulate sales in retail stores. Rebates often work in conjunction with other marketing activities by the manufacturer and retailer.

Rebates - Why? Cash refunds may escalate in value to encourage multiple purchases of a product (the more you buy the more money you get back). Cash-back rebates are popular among durable goods products such as cars and appliances; consumers will postpone purchases and wait for a good rebate offer. Risk is reduced for both customer and retailer

Trade Promotion Copyright © 2013 Pearson Canada Inc “Incentives offered distributors to secure marketing support.” The incentives offered are part of a “push” strategy. ManufacturerWholesalerRetailerConsumer Promotion Objectives Secure listings Increase volume In-store merchandising activity

Trade Promotion Strategies Copyright © 2013 Pearson Canada Inc Trade promotion offers that help push a product through the channel and improve sales in retail stores include: Cooperative Advertising – Funds allocated by a manufacturer to pay for a portion of a retailer’s advertising. It is often based on a percentage of sales the retailer buys in a certain period. Performance Allowances – A discount offered by a manufacturer to a distributor who performs a promotional function on the manufacturer’s behalf.

Trade Promotion Strategies Copyright © 2013 Pearson Canada Inc Dealer Premiums – An incentive (gift of some kind) offered a distributor to encourage a special purchase (i.e., a specified volume of merchandise) or to secure additional merchandising support. Ex. Free displays, signage, bonus product, TPR on other products – adding value for the channel member… Dealer premiums are a controversial issue and many buying organizations forbid them; the buyer of the retail operation gets the benefit of the premium, not the retailer. Ethical issues The way you do this matters…

Trade Promotion Strategies Copyright © 2013 Pearson Canada Inc Dealer Display Material – Self- contained, custom-designed merchandising units that either temporarily or permanently display a manufacturer’s product. Why? Support Retailer Limited Shelf Space, ad space, effort etc Helps the retailer help us Push Strategy

Experiential Marketing Copyright © 2013 Pearson Canada Inc “A type of marketing that creates awareness of a product by having the customer interact directly with the product. “ Experiential marketing is a relatively new term but the fundamental concepts behind it are not; activities such as free sampling, public relations stunts, product seeding, and event marketing are classified as experiential marketing. To engage consumers requires a carefully designed and emotive experience. Other forms of marketing communications create interest in the experience (event).

Events and Sponsorships Copyright © 2013 Pearson Canada Inc Event marketing and sponsorships fall under the umbrella of experiential marketing. Event Marketing – The process, planned by a sponsoring organization, of integrating a variety of communications elements behind an event theme. Sponsorship – A situation in which a sponsor agrees to support an event financially in return for advertising privileges associated with the event.

Primary Types of Sponsorships Copyright © 2013 Pearson Canada Inc Sports Entertainment Arts and Culture $1.22 billion are invested in sponsorship in Canada, annually.

Venue Marketing Copyright © 2013 Pearson Canada Inc A company or brand is linked to a physical site, such as a stadium, arena or theatre. Air Canada Centre Rogers Arena Rexall Place Bell Centre In what cities are these buildings?

Event Marketing Strategy Copyright © 2013 Pearson Canada Inc Red Bull plans and sponsors its own “on the edge” events around the world. Such events are popular with the brand’s younger target market. Red Bull’s “Crashed Ice” event in Quebec City.

Public Relations Copyright © 2013 Pearson Canada Inc A variety of activities and communications that organizations undertake to monitor, evaluate and influence the attitudes and opinions of customers. And ultimately, their buying behaviours. PR’s Primary Roles: Corporate Communications Reputation Management Publicity Generation Fundraising

Advertising vs. PR ADVERTISING Brand Image Controlled by Marketer PUBLIC RELATIONS Corporate Image Controlled by Media, Influenced by Marketer CREDIBILITY

Roles of Public Relations Copyright © 2013 Pearson Canada Inc Publicity Generation – An organization communicates newsworthy information to the public. Examples of Newsworthy Information: New product launches Discoveries Diffuse negativity Social responsibility achievements

Public Relations Strategies Copyright © 2013 Pearson Canada Inc A variety of communications tools are available: Press Release – A document prepared by an organization containing relevant information that is sent to the media for publication or broadcast. Press Conference – A gathering of news reporters invited to a location to witness the release of important information.

Roles of Public Relations Copyright © 2013 Pearson Canada Inc Other means of generating publicity or “buzz” for a product could involve the practice of product seeding. Product seeding involves giving a product free to trendsetters who, in turn, influence others to become aware of a product and hopefully purchase it.

Personal Selling Copyright © 2013 Pearson Canada Inc “Personalized communications between a seller and buyer in which the benefits of a product are presented in order to make a sale.” Selling is the human component of the marketing communications mix.

Visual Model Copyright © 2013 Pearson Canada Inc.15-32