1. Sales Promotion What is the difference between Promotion, Advertising, Publicity, and Personal Selling, Direct Marketing?

2. Advertising paid communication from a company to the public. It communicates messages about a product, service or company that appears in mass media such as television, radio and magazines.

3. Personal Selling direct communication between a company and consumers. It is usually done in person but sometimes over the phone.

4. Direct Marketing direct communication between a company and an individual customer other than face-to-face personal selling.

5. Sales Promotion short term incentive aimed at increasing the purchase of a product or service. Where advertising says “buy our product”, Sales promotion says “Buy it now!”

6. Publicity publicity is a non-paid for positive or negative media coverage.

7. Public Relations is an organized effort to present a positive image of the company or its products in non-advertising communications. Readers will believe a 3rd party more easily.

8. Types of Sales Promotions: Coupons Premiums Contests Sweepstakes Sampling Bonus pack Rebate Point of purchase (POP)

9. Contests and Sweepstakes Award a prize to a select number of entrants Contests are more skill based while sweepstakes are more luck based Canadian law prohibits exchanging money for a chance to win a luck based game (This is primarily called gambling and is controlled by the provincial governments) –Companies get around this using a “skill” testing question –They also offer a “no purchase necessary” option for non- buyers. (There are usually barriers to this type of entrance though – mail in, fax in, fill out more forms, etc.) –By having the contest winner produce some sort of skill or knowledge, they can claim that the sweepstake is actually a contest

10. Contest/Sweepstakes continued… Two fold purpose of contests: (1) Promote new or existing products, (2) gain customer information for company database Key idea: People like to receive something for nothing Used for both products and services – e.g., Visa is running a contest where you can get your monthly bill paid off by Visa. All you have to do is use your Visa card.

11. Contests don’t always work: Northwest Airlines offered the use of one of its jet for a round trip to Florida and 3 night’s accommodations for the winner of their contest and 92 of his/her friends. Unfortunately, winnings are taxable in the U.S. and the winner did not want to pay the taxes on the winnings. Northwest offered $15,000 to offset the loss; however, these winnings were taxable too. The winner forfeited the trip and decided to settle for a smaller cash prize.

12. Refunds and Rebates (Trial Offers) Refund: return of the full amount of money tendered by the customer Rebate: returns a portion of the money tendered by the customer How are they used: Refunds – for trial offers ; Rebates – to promote the sale of other company products, or the sale of the purchase product

13. Examples: Rebates on Computer Hardware (Printers), website that gives you the best purchase price for items, services – cash back if not satisfied Goal of: –Trial offers: let you try the product first hand – most people won’t go through the trouble of sending it back unless they are really unsatisfied. –Rebates: future sales – rebates on next item purchased –Both allow companies to generate mailing lists

14. Coupons Document that grants the person a reduction in the price of a specific product or service (has a face value, but not a cash value) Where do you obtain coupons from: –Newspapers (or any print) –On-line –Flyers (Mail) –At a store’s cash register/entrance –Displays in stores –Cash register receipts –Purchased coupon booklets

15. Coupons continued… Redemption rate – number of coupons issued compared with the number of coupons used What would affect the redemption rate? –Face value –Ease of use –Availability/knowledge of coupon

16. So many coupons – how to make yours stand out? –Put coupons right on product (buy and save immediately, future sales) – place where customers can find all the coupons redeemable in the store –Computerized cash registers that can check the bar codes of the purchases and print out coupons that apply to purchases (or similar purchases – e.g., a person buying a razors may get a coupon print out for shaving cream) Example: Boston Pizza gave out fortune cookies to its customers when promoting their expansion into Taiwan. One in every ten cookies had a coupon for a free pizza or soft drink

17. Samples Offering in whole or part a product or service to the customer free of charge Good for promotion of new products or improved products Better at point of purchase than in mail or delivery Works well with other forms of promotion – e.g., sample a food at a grocery store and have coupons at the sample table so that customers get a deal on the purchase Examples: Pepsi Taste Test (Market Research in form of survey – but also a sample), Costco (get an entire meal by walking around sampling products), Shoe cleaner, eye glasses cleaner (just soap), window cleaning (will clean one window)

18. Premiums and Self Liquidators Promotions that allow people to acquire something by purchasing something else Premiums: free product or service offered after purchase Self-Liquidator: a product or service offered after purchase at a substantially reduced price

19. Premiums and Self Liquidators Examples Liquor Store – get a small bottle of Jack Daniel’s when you purchase a big bottle of Bailey’s Irish Cream Air Miles Cards, buy a coke and keep the mug, Coffee cards, store credit cards, skate sharpening (buy five get the sixth one free) Good for advertising as many premium (giveaway items) are hats, shirts, bags, etc. with the company logo on it

20. Bonus Packs When a product offers and increased quantity of said product Toothpaste – get 25% more Soap – buy five bars get the sixth one free Services? (Rent our car for two days and the third day is free – don’t have to come back or make another purchase to use the day – like in a premium)