1. Idil Yaveroglu Lecture Notes
Chapters 16 & 17 Sales Promotions, Direct Marketing and Personal Selling
Idil Yaveroglu
Lecture Notes

2. Definition Sales Promotion
Sales promotions are short-term incentives to encourage the purchase or sale of a product or service.

3. Sales Promotion Sales Promotions
Can be targeted at final buyers, retailers and wholesalers, business customers, and members of the sales force.
The use of sales promotions has been growing rapidly.
78% are to the trade with 22% to end consumers

4. Sales Promotion Objectives -- Consumer Promotions:
Increase short-term sales or long-term market share
Generate product trial
Objectives -- Trade Promotions:
Obtaining distribution and shelf space
Encouraging retailers to advertise the brand
Objectives -- Sales Force Promotions:
Signing up new accounts

5. Consumer Sales Promotions
Samples
Coupons
Cash Refunds (Rebates)
Price packs (cents-off deals)
Advertising Specialties
Premiums
Patronage Rewards
Point-of-Purchase Communications
Contests, Games, and Sweepstakes

6. Coupons
A certificate that entitles consumers to an immediate price reduction when they buy the product
Encourage product trial and repurchase
Oldest and most widely used form of sales promotion
Average redemption rate is only 2%
Mostly price sensitive consumers redeem coupons
May reduce profitability if used heavily by current users

7. Premiums
A premium is an extra item offered to the consumer usually in exchange for some proof that the promoted product has been purchased.
Two for one packs
Mc. Donalds
Happy Meals
Increase consumption
Reinforce purchase
decision
Encourage switching
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8. Premiums – Mc Donalds Happy Meals
101 Dalmations
86 Million Happy Meals sold
Teenie Babies (1997 & 1998)
1st round:
100 Million toys in 10 days
Consumers waited longer than 1 hour
In some stores police was called in to control crowds
2nd round:
240 million toys sold in one month
Some restaurants sold toys/day

9. Contest and Sweepstakes
Generally designed to create interest in a good or service

10. Sample
A promotional program that allows the consumer to try the product for free
Risk free trial
Can be done by:
Direct mailing
Door to door delivery
Packaging with another product
Retail store demonstration
Eg. AOL free trial CD’s…

11. Rebates
A cash refund given for the purchase of a product during a specific period. The purchaser is required to mail in a rebate form and proof of purchase.
Allows manufacturers to offer direct price cuts
Used to build customer databases
Only 5-10% ever bother to fill out and mail rebate request.
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12. Loyalty Programs Reward loyal consumers for making multiple purchases
i.e. frequent flyer programs
It is more profitable to retain existing customers than acquire new ones
Goal is to build long term mutually beneficial relationships

13. Point of Purchase Displays
Includes all signs (displays, posters, signs, shelf cards, and other visual materials) designed to influence buying decisions at the point of sale
Effective for impulse purchase

14. Sales Promotion Trade Promotion Tools
Discounts (also called price-off, off-list, and off- invoice)
Allowances
Advertising allowances
Display allowances
Free goods
Push money
Specialty advertising items

15. Direct Marketing
DIRECT MARKETING: A system of marketing by which an organization communicates directly with the target consumers to generate a response or transaction.
Uses a set of direct response media such as direct mail, telemarketing, interactive TV, print, and the Internet.

16. Forms of Direct Marketing
Personal Selling
Telephone Marketing
Direct-Mail Marketing
Catalog Marketing
Kiosk Marketing
Online Marketing
Direct-Response TV Marketing

17. Direct Marketing and Database Marketing
Direct marketing programs employ principles of market segmentation and targeting even more than others. To do so, direct marketers use database marketing – the use of specific information about individual customers and/or prospects to implement more effective and efficient marketing communications.

18. Direct Marketing Integrated Direct Marketing
Public Policy and Ethical Issues
Irritation, Unfairness, Deception, and Fraud
Invasion of Privacy

19. Personal Selling The Role of the Sales Force
Two-way personal communication
More effective than advertising in complex selling situations
The sales force plays a major role in most companies
The sales force works to represents the company to customers
They also represent the customers to the company