Ch. 16, Pt. 2, Intro to Advertising

The brands consumers switch between are all perceived as

Bing satisfactory and interchangeable, and consumers purchase whatever brand is on a special sale or for which they have a coupon.

Some critics argue that sales promotion increases come at teh expense of

Brand equity and every dollar that goes into promotion rather than advertising devalues the brand.

Nonfranchise-building promotions do not contribute to the building of

Brand identity and image.

Many marketers use information they get from premium offers, trackable coupons, rebates, and sweepstakes to

Build databases for future direct-marketing efforts.

Consumer franchise-building promotions are designed to

Build long-term brand preference and help the company achieve the ultimate goal of full-price purchases that do not depend on a promotional offer.

It is likely that many marketers will continue to yield to the temptation rather than try to sell their brands at full price, particularly when

Competitors are using promotional tactics to attract their customers.

Not all sales promotion activities dtract from the value of the brand. It is important to distinguish between

Consumer franchise-building and non-franchise building promotions.

Many companies find it difficult to avoid using promotions, particularly when

Consumers have become accustomed to them.

Companies increasingly depend on sales promotion to encourage

Consumers to try new brands.

Well-planned CFB activities can

Convert consumers to loyal customers.

The extra incentive to buy is usually the key element in a promotional program and it may be a

Coupon or price reduction, the opportunity to enter contest or sweepstakes, a money-back refund or rebate, or an extra amount of the product.

Many sales promotion offers end up being used by

Current users of a brand rather than attracting new users.

non-FB promotions merely borrow

Customers from other brands.

Like many large retailers, Walmart often asks for account-specific promotions that are

Designed for and offered only through its stores.

Some critics say that trade promotions in particular contribute to the

Destruction of brand franchises and equity as they encourage consumers to purchase primarily on the basis of price.

Well-marketed private-label products are forcing national brand leaders, as well as second-tier brands, to

Develop more innovative promotional programs and to be more price-competitive.

Many companies are tailoring their trade promotions to key retail accounts and

Developing strategic alliances with retailers that include both trade and consumer promotional programs.

A trade contest directed towards wholesalers or retail personnel gives them

Extra incentive to perform certain tasks or meet sales goals.

Trade allowance or discount give retailers a

Financial incentive to stock and promote a manufacturer's products.

Many brand managers stay in their positions for a short time period, which motivates them to

Focus on the use of promotional tactics that can have more of an immediate impact.

Private-label brands are giving national brands more competition

For retail shelf space and increasing their own marketing, including the use of traditional sales promotion tools.

The extra incentive provided may be a free sample of the product given in hopes of

Generating a future purchase or a premium.

Many retailers require special discounts or allowances from manufacturers just to

Handle a new product.

Companies that fail to comply with retailers' demands for more trade support often

Have their shelf space reduced or even have their products dropped.

Rather than allocating large amounts of money to run dull ads, many marketers

Have turned to sales promotion.

Consumer-product manufacturers used to create demand for their brands by using

Heavy advertising and some consumer oriented promotions like samples, coupons and premiums, and exerted pressure on retailers to carry their products.

Most trade promotions that are forwarded through the channels reach consumers

In the form of lower prices or special deals and lead them to buy on the basis of price rather than brand equity. Giving these trade promotions criticism for being non-franchise building.

According to some, advertising is still the most effective way to build teh long-term franchise of a brand as it

Informs consumers of a brand's features and benefits, and creates an image and helps brands and maintains brand loyalty.

When asked about why managers take a short-term perspective, marketing and brand managers point out that they are

Judged on quarterly sales because investors focus on these numbers, and the link between promotion and sales is obvious.

The consolidation of the retail industry has resulted in

Larger chains with greater buying power and clout.

Ways to accelerate the purchase process include

Limited-time offers like price-off deals to retailers or a coupon with an expiration date.

Limitations of non-fb promotions must be recognized when a

Long-term marketing strategy for a brand is developed.

Consumer sales promotion efforts cannot make consumers

Loyal to a brand that is of little value or does not provide them with a specific benefit.

Managers need to develop and arm themselves with long-term measures of brand performance and use them to

Make smarter marketing decisions that will not undermine brand equity.

Consumer and trade promotions are easily matched by competitors, and

Many marketers find themselves in a promotional trap where they must continue using promotions or be at a competitive disadvantage.

The packaged-goods brand management system has contributed to

Marketers' increased dependence on sales promotion.

Exciting, breakthrough creative ideas are difficult to come by, and consumers' attention to

Mass-media advertising continues to decline.

The reliance on sales promotion is particularly high in

Mature and slow-growth markets, where it is difficult to stimulate consumer demand through addvertising.

Many marketers now use the various forms of online marketing to implement sales promotion programs as well as

Measures of their effectiveness.

Brand managers use sales promotions routinely, not only to induce new products or defend against the competition, but also to

Meet quarterly or yearly sales and market share goals.

Promotional offers have become commonplace in various forms of online advertising including

Mobile marketing as a way of attracting the attention of consumers or encouraging them to take action.

Many marketers are not investing in their brands as they take

Monies away from media advertising to fund short-term promotions.

It takes longer for an ad campaign to show some impact, and the effects are

More difficult to measure.

Consumers have become less brand loyal and are purchasing

More on the basis of price, value, and convenience which is a reason for the increase in sales promotions.

Sales promotion attempts to maximize sales volume by

Motivating customers who have not responded to advertising.

Price-off deals, bonus packs, and rebates or refunds are examples of

Non-FB (nonfranchise building) sales promotion techniques.

Consumers are not naive; they know that manufacturers or retailers will

Offer some type of promotion that encourages them to wait for the next deal rather than purchasing a product at full price.

Marketers are shifting more of their promotional efforts to direct and digital marketing, which

Often includes some form of sales promotion incentive.

Estimates are that marketers spend more than half of their promotional budgets

On sales promotion, with the remainder being allocated to media advertising.

In recent years, several developments have helped transfer power from the manufacturers to retailers with the advent of

Optical checkouts canners and sophisticated in-store computer systems, retailers gained access to data concerning how quickly products turn over, which sales promotions are working, and which products make money.

Marketers are feeling pressure from the trade as

Powerful retailers demand sales performance from their brands.

Large chains have become accustomed to trade promotions and can

Pressure manufacturers to provide deals, discounts, and allowances.

Marketers use coupons, buy-one-get-one free offers, rebates, special sales events, price-off deals and other discounts to attract

Price-sensitive consumers.

As marketers continue to shift from media advertising to direct marketing, promotional offers will

Probably be used even more to help build databases.

Sales reps may pressure marketing or brand managers to use

Promotions to help them move the products into the retailers' stores.

Sales promotion involves some type of inducement that

Provides an extra incentive to buy.

Marketers must partner effectively with trade accounts, and this often means

Providing them with an additional incentive to stock and promote their brands and participate in various promotional programs.

By providing an extra incentive, sales promotion techniques can motivate consumers to

Purchase a larger quantity of a brand or shorten the purchase cycle of the trade or consumers by encouraging them to take more immediate action.

There is concern that managers have become too dependent on the

Quick sales fix that can result from a promotion and that the brand franchise may be eroded by too many deals, especially in mature and slow growth markets.

The sales force may have short-term quotas or goals to meet and may also receive

Requests from retailers and wholesalers for promotion.

Real-time data available from computerized checkout scanners make it possible for

Retailers to monitor promotions and track teh results they gain on a daily basis.

Consumer Franchise-Building (CFB) Promotions

Sales promotion activities that communicate distinctive brand attributes and contribute to the development and reinforcement of brand identity.

Retailers favor new brands with strong

Sales promotion support that will bring in more customers and boost their sales and profits.

Many marketers and retailers often condition consumers to wait for discounts through

Sales, special offers, and coupons, which make it very difficult to sell their merchandise at full prie.

The technology is already in place to enable marketers to communicate individually with

Target consumers and transform mass promotional tools into ways of doing one-to-one marketing.

Factors that have led to the increase in importance of sales promotion/shift in marketing dollars to sales promotions including

The growing power of retailers, declining brand loyalty, increased promotional sensitivity, brand proliferation, and fragmentation of the consumer market, short-term focus of many marketers, increased accountability, competition, and the growth of digital and social media.

Managers become enamored with short-term increases in sales, which resulted in the allocation of

The majority of their marketing budgets to consumer and trade promotions.

The Development of New Products and sales promotions

The market has become saturated with new brands, most of which lack significant advantages.

While advertising appeal to the mind and emotions to give the consumer a reason to buy, sales promotion appeals more to

The pocketbook and provides an incentive for purchasing a brand.

Promotions are important in getting retailers to allocate some of

Their precious shelf space to to new brands.

Reasons for consumers' increased sensitivity to sales promotion offers is that

They save money, and that many purchase decisions are made at the point of purchase by consumers who are increasingly time-sensitive and facing too many choices.

The markets for many products are mature and stagnant, and it is increasingly difficult

To boost sales through advertising.

The most popular reason for consumers to connect with brands on social media is

To get regular coupons/promotions, the next most popular reason is because consumers were interested in buying the brands products, followed by an incentive like sweepstakes, discounts, or gift cards.

Many consumers are loyal coupon users and/or are conditioned

To look for deals when they shop.

The powershift in the market place from manufacturers

To retailers has encouraged increased spending on sales promotions.

Many companies are demanding measurable, accountable ways to relate promotional expenditures

To sales and profitability.

Consumers respond favorably

To the incentives that sales promotions provide.

Marketers are relying more on samples, coupons, rebates, premiums and other promotional tools to achieve

Trial usage of their new brands and encourage repeat purchase.

Proponents of advertising argue that marketers must maintain strong franchises if they

Want to differentiate their brands and charge a premium price for them.

Various types of promotion such as coupons or discounts along with entry forms for contests and sweepstakes appear on marketers'

Websites as well as their social media pages on Facebook, Twitter, and Instagram.

For many years, manufacturers of national brands had the power and influence; and retailers

Were just passive distributors of their products.

In addition to pressuring their marketing or brand managers and sales force to produce short-term results, many companies are demanding to know

What they are getting for their promotional expenditures.

Sales promotions can be targeted to different parties in the marketing channel

Whether that's through consumer-oriented sales promotions or trade-oriented sales promotion.

Sales promotion can provide an inducement to marketing intermediaries such as

Wholesalers and retailers.

The ideal sales promotion program generates sales that

Would not be achieved by other means.

Nonfranchise-building (non-FB) Promotions

designed to accelerate the purchase decision process and generate an immediate increase in sales.

Sales Promotion offers are used as a way to encourage consumers to

"Like" their brands on Facebook or follow them on Twitter.

Comarketing AKA

Account-Specific Marketing, and is when a manufacturer collaborates with an individual retailer to create a customized promotion that accomplishes mutual objectives.

Results from sales promotion programs are generally easer to measure than those from

Advertising.

Consolidation has given large retailers more money for advancing

Already strong private-label initiates, and sales promotion is the next step in the marketing evolution of private-label brands.

Consumers love their brands but often want

An extra incentive to buy them.

Retailers use the information from optical checkout scanners and in-store computer systems to

Analyze sales of manufacturers' products and then demand discounts and other promotional support from manufacturers of lagging brands.

Trade promotions receive the most criticism for being non-franchise building for good reasons including the fact that many of the promotional discounts and allowances are given to trade

Are never passed on to consumers.

Many consumers may switch back and forth among a set of brands they view

As essentially equal.

Consumer sales promotions can make consumers

Aware or a brand and, by communicating its specific features and benefits, contribute to teh development of a favorable brand image.

Nonfranchise-Building Promotions do not communicate information about

A brand's unique features or the benefits of using it.

Short-term non-FB promotions have their place in

A firm's promotional mix, particularly when competitive developments call for them.

Account-Specific Marketing

A manufacturer collaborates with an individual retailer to create a customized promotion that accomplishes mutual objectives.

The slotting fees or allowances can make it expensive for

A manufacturer to introduce a new product.

Managers who are being held accountable to produce results often use price discounts or coupons, since they produce

A quick and easily measured jump in sales.

Many companies are too focused on short-term results because the profusion of

Scanner data allows brand and marketing managers, as well as retailers, to see how sales often spike in response to promotional discounts.

Retailers may use a promotional deal with one company as leverage to

Seek an equal or better deal with its competitors.

Sales Promotion techniques can be used as part of the

Shaping process to lead the consumer from initial trial to repeat purchase at full price.

The increase in sales promotion is motivated by marketing plans and reward systems geared to

Short-term performance and the immediate generation of sales volume

Major reason for the increase in spending on sales promotion is that the promotion industry has seen increased

Sophistication and a more strategic role and focus which have elevated the discipline and its role in the IMC program of many companies.

A sales promotion is essentially an acceleration tool, designed to

Speed up the selling process and maximize sales volume.

Many companies are now making promotional specialist part of their

Strategic brand-building team, a move that puts sales promotion on par with media advertising.

Brand managers often view investing in advertising or product development as benefiting the performance of

Subsequent managers rather than their own.