1. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Sales Promotion 15-1

2. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Boony Doll a ‘boonanza’ for sales promotion 15-2

3. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia An extra incentive to buy A tool to speed up sales Targeted to different parties Sales promotion A direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating an immediate sale. 15-3

4. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Samples Coupons Premiums Contests/sweepstakes Refunds/rebates Bonus packs Price-off deals Loyalty programs Cooperative advertising Trade allowances Training programs Contests, dealer incentives Point-of-purchase displays Trade shows Sales promotion vehicles C onsumer-oriented Trade-oriented Event marketing 15-4

5. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Growing power of retailers Declining brand loyalty Increased promotional sensitivity Brand proliferation Fragmentation of consumer markets Short-term focus of marketers Increased accountability Clutter Explanations for increase in sales promotion Some reasons 15-5

6. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia The shifting role of the sales promotion agency 15-6

7. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Target a specific market segment Obtain trial and repurchase Increase consumption Defend current customers Enhance IMC and build brand equity Consumer-oriented sales promotion Identify target audiences Determine sales promotion objectives Set measurable goals 15-7

8. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Myer gift with purchase 15-8

9. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Types of consumer promotions used by packaged goods manufacturers 15-9

10. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia The products are of relatively low unit value, so samples do not cost much The products are divisible and can be broken into small sizes that can reflect the product’s features and benefits The purchase cycle is relatively short so the consumer can purchase in a relatively short time period Sampling Sampling works best when 15-10

11. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Bertoli’s ‘Taste of Tuscany’ 15-11

12. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Door-to-door Direct mail In-store sampling On-package sampling Event sampling With magazine/newspaper Other Sampling distribution Methods 15-12

13. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Bundle of baby products 15-13

14. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Coupons Used by virtually all packaged goods manufacturers The oldest and most widely used sales promotion tool 15-14

15. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Advantages and limitations of coupons Advantages Disadvantages Appeal to price-sensitive consumer Can offer price break without retailer’s cooperation Can be effective way to induce trial of new or existing products Can be way to defend market share and encourage repurchase Coupons are often used by loyal consumers who may purchase anyway Misredemption and fraud Difficult to determine how many consumers will use coupons and when Declining redemption rates and high costs of couponing 15-15

16. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Other Magazines In/on pack Direct mail Newspaper coop. Shop-a-docket Freestanding inserts Coupon distribution 15-16

17. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Shop-a-docket: an Australian innovation 15-17

18. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Free premiums: Only require purchase of the product Self-liquidating premiums: require consumer to pay some or all of the cost of the premium Premiums Two types of premiums Premium: an offer of an item of merchandise or service either free or at a low cost that is an extra incentive for customers 15-18

19. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia McDonald’s Happy Meals 15-19

20. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Contests and sweepstakes Contest: a promotion where consumers compete for prizes or money on the basis of skills or ability. Winners are determined by judging entries or ascertaining which entry comes closest to some predetermined criteria. Sweepstakes/games: a promotion where winners are determined purely by chance and cannot require a proof of purchase as a condition for entry. Winners are chosen by random selection from a pool of entries or generation of a number to match those held by game entrants. 15-20

21. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Do not contribute to brand building Focus not on brand Effectiveness Negative publicity Federal regulations Use by professionals or hobbyists Effectiveness Legal considerations May generate negative publicity Problems with contests and sweepstakes Problems 15-21

22. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Bonus packs Frequency/ loyalty programs Event marketing Price-off deals Refunds and rebates Other popular consumer sales promotion tools Other promotional tools 15-22

23. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia A bonus for consumers 15-23

24. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Loyalty programs 15-24

25. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Summary of consumer-oriented promotions and market objectives 15-25

26. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Encourage retailers to display existing brands Obtain distribution of new products Maintain trade support for existing products Build retail inventories Trade-oriented sales promotion objectives Objectives 15-26

27. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Trade shows Contests and incentives Trade allowances Point-of-purchase displays Sales training programs Cooperative advertising Types of trade-oriented promotions Buying Allowances Promotional Allowances Slotting Allowances Buying allowances Promotional allowances Slotting allowances 15-27

28. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Types of cooperative advertising Cooperative advertising Vertical cooperative advertising Ingredient- sponsored coop advertising Horizontal cooperative advertising 15-28

29. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia The sales promotion trap 1 2 3 4 15-29

30. Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Advertising and Promotion by Belch Slides prepared by Bronwyn Higgs, Victoria University, Australia Summary and conclusions Over the past two decades, marketers have been allocating increased share of promotional budget to sales promotion. Sales promotion techniques can be: –consumer oriented –trade oriented. Sales promotion techniques include sampling, coupons, premiums, competitions, rebates and refunds. Sales promotion abuse can occur when marketers become overly dependent on sales promotions techniques at the expense of building long-term brand position, brand equity and customer relationships. 15-30