1. Sales Promotion
Chapter Eleven

2. Key Learning Points
How sales promotion differs from other modes of communication
The different types of sales promotions
Differences between customer, trade, and retailer-oriented promotions
Issues in the development of promotional strategy and objective-setting
Allocating money between advertising and sales promotion
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3. Table 11.1 Automobile Company Average Sales Incentives in 2009
Visit Edmunds.com
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4. “Sales promotion is an action-focused marketing event whose purpose is to have a direct impact on the behavior of the firm’s customers.”
- Robert C. Blattberg & Scott A. Neslin
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5. Figure 11.1 Simplified Channel and Promotional Structure
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6. Table 11.2, Part A Types of Consumer Promotions
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7. Sales Promotion Price-oriented promotions
Couponing is the dominant form of activity.
Redemption is low.

8. Table 11.4 Where Coupons are Distributed
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9. Methods of Coupon Distribution
Marketing Research
Methods of Coupon Distribution
Free-standing inserts
ROP newspaper
Sunday supplements
Magazine
Direct mail
On-package
Instantly redeemable
In-package
Cross-ruff
Retailer coupons
Coupon machines
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10. Table 11.5 Couponing Objectives
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11. Discussion
E-coupons are gaining in popularity. Visit one of the web sites below to learn more.
What advantages do e-coupons offer compared to traditional coupons?

12. Sales Promotions Types of price-oriented promotions:
Coupons
Price, value, or bonus packs
Refunds, rebates and money-back offers
Interest rate promotions
In-store discounts
Price-oriented promotions can have negative effects on consumer behavior.

13. Sales Promotions
Product-oriented promotions give away either the product itself or a closely related product.
Sampling is commonly used for new products.

14. Sales Promotion Product-oriented promotions
Premiums: Free merchandise provided with purchase or with fee and proofs of purchase

15. Sales Promotions Special event promotions: Contests and sweepstakes
Tie-ins to sporting events and movies

16. Table 11.2, Part B Types of Trade Promotions
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17. Price-Based Trade Promotions
Sales Promotions
Price-Based Trade Promotions
Provide retailers with an incentive to carry the product.
Often used when manufacturers want retailers to pass on savings to buyers.
Instead, many companies engage in forward buying practices.
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18. Table 11.2, Part C Types of Retailer Promotions
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19. Illustration
Point-of-purchase displays include information and other company-paid advertising.
End of aisle displays or endcaps are a popular form of retailer promotion.
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20. Promotion Strategy, Objectives and Evaluation
Consumer-oriented promotions:
Strategic issues
Effect on new products
Effect on existing brands
Promotional dilemma
Cost and benefits must be considered

21. Table 11.6 Consumer Promotion Objectives
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22. Figure 11.4 Evaluating Sales Promotions: Tracking Studies
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23. Promotion Strategy, Objectives and Evaluation
Incremental Effects of Price Promotions
Accelerated regular purchases
Accelerated captured purchases
Unaccelerated regular purchases
Unaccelerated captured purchases
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24. Figure 11.5 Strategies for Trade Dealing
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25. Table 11.7 Objectives of Trade Deals
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26. Table 11.8 Sales Promotion Plan
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27. Illustration
Proctor & Gamble created the following sales promotion plan for a new consumer goods product.
Trade allowances
Sampling
Couponing
Special promotions
Refunds
Premiums
Sweepstakes and contests
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28. Promotion Strategy, Objectives & Evaluation
Evaluating trade promotions
Evaluation typically uses tracking of before-and-after results.
The frequency with which deals are passed-through should also be considered.
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29. Table 11.9 Sales Effect of Deal Discount, Feature Advertising, and Displays
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30. Activity
Suppose that you were the marketing manager responsible for introducing a new brand of snack food. Describe the types of consumer and trade sales promotions that you would use to introduce the product.

31. Promotion Budgeting
Budgeting follows the same approaches discussed for setting ad objectives.
Select method of budgeting.
Determine overall advertising and promotion budget.
Determine amount to be spent on promotion.
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32. Conditions Affecting Total Budget for Advertising and Promotions
Sales Promotions
Conditions Affecting Total Budget for Advertising and Promotions
Standardized product
Many end-users
Small purchase amount
Channel members make sales
Premium-priced product
High contribution margin
Small market share
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33. Promotion Budgeting
Several factors influence the allocation of money between advertising and promotion.
The total amount of resources
Customer factors
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34. Promotion Budgeting Consumer Franchise Building CFB $ CFB ratio =
(CFB$ + non-CFB$)
* CFB activities are those that build brand equity.
* Non-CFB activities focus on price alone.
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35. Sales Promotion and Information Technology
In-store information technology

36. Illustration
The marketing manager for the number two brand of peanut butter could take several steps to increase market share.
Users of #1 brand receive high value coupon.
Redeemed coupons of #1 brand generate repeat purchase coupon.
Complimentary purchases generate medium value coupon.
Checkout Direct program is implemented.
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37. Discussion Questions
Sales promotions can be used in the marketing of services and not-for-profit organizations as well as in consumer goods marketing.
While some charitable organizations sell merchandise, most use marketing to solicit donations or volunteers.
Which promotion techniques are most appropriate for charities that do not sell merchandise?
Given that most charities operate with very limited budgets, which techniques could realistically be used by those that do sell merchandise?
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38. Executive Summary Sales promotion is short-term oriented.
Three kinds of promotions exist.
Customer promotions are often price-related.
Trade promotions provide incentives to channel members.
Retailer promotions involve both price and special displays.
Evaluating sales promotions is important.
Promotions are being run on the Web.
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