Ch. 15. Sales Promotion, Point of Purchase ADV, and Support Media

objectives for point of purchase displays

draw consumer's attention maintain purchase loyalty stimulate increase or varied usage stimulate trail use by users of the competitors

annual spending on outdoor advertising

$8 million

T/F. the development and management of an effective sales promotion program requires a major commitment by a firm

True

off-invice allowances

advertisers allow wholesalers and retailers to deduct a set amount from the invoice they receive for merchandise a price reduction offered to the trade on a particular marketer's brand

effectiveness of contests and sweepstakes

advertisers must design them in such a way that consumers perceive values in the prizes and find playing the games intrinsically interesting

frequency programs

also referred to as continuity programs or loyalty card programs offers customers discounts or free product rewards for repeat purchase or patronage of the same brand, company, or retailer benefits larger firms better than smaller firms

incentives

awards in the form of of travel, gifts, or cash bonuses for reaching targeted sales levels can induce retailers and wholesalers to give a firm's brand added attention ex: Volvo, leading dealership wins super bowl tickets

increased power of retailers

because of consumer demands, retailers are demanding more deals from manufacturers. manufacturers use sales promotions to maintain good relations with the powerful retailers who are their link to the consumers

aerial advertising

can involve airplanes pulling signs or banners, skywriting, or blimps ex: Goodyear

drawbacks of billboards

can't use long or complex messages impact depends on location fade into the landscape visual pollution

mobile sampling

carried out by logo-emblazoned vehicles that dispense samples, coupons, and premiums to consumers at malls, shopping centers, fair grounds, and rec areas

push money

carried out through a program in which retail salespeople are offered a monetary reward for featuring a marketer's brand with shoppers ex: if they sell a particular brand for a manufacturer as opposed to a competitors brand, they get extra $50

demand for greater accountability

companies are demanding greater accountability across all functions and evaluating activities for the contribution to sales. unlike advertising, more immediate effects of sales promotions are typically easier to document

contest

consumers compete for prizes based on skill or ability based on judging or a predetermined criterion

borrowing from future sales

consumers or trade buyers who would have purchased the brand anyway may be motivated to stock up at the lower price. this results in reduced sales during the next few time periods of measurement

risks of sales promotion

creating a price orientation borrowing from future sales alienating customers managerial time and expense legal considerations

reasons for shifting funds towards sales promotion

demand for greater accountability short term orientation consumer response to promotions proliferation of brands increased power of retailers clutter

business-market sales promotion

designed to cultivate buyers in organizations or corporations who are making purchase decisions about a wide range of products, including computers, office supplies, and consulting services trade shows, premiums, incentives, loyalty/frequency programs

short term orientation

pressure from stockholders to increase quarter by quarter revenue and bottom line mentality coupled with rewards and punishments for managers are driving companies to seek tactics that have short term effects

the "message" in sales promotion

price reduction, free samples, a prize, or some other incentive for consumers to try a brand or for retailers feature a brand in a store

POP adv and the Trade and Business market

product displays and information sheets offered to retailers often them to support one distributor or manufacturer's brand over another can also win shelf space and exposure in a retail setting

coupon

entitles a buyer to a designated reduction in price for a product or service (oldest and most widely used)

trade shows

event where several related products from many manufacturers are displayed and demonstrated to members of the trade company reps staff a booth and are there to explain the products and services and perhaps make an important contact for the sales force

bill back allowances

provide retailers a monetary incentive for featuring a marketer's brand in either advertising or in store displays the marketer requires the retailer to verify the services

sale training programs

providing training for retail store personnel the increased complexity of products has made it important for manufacturers to ensure that the proper factual information and persuasive themes are reaching the consumer at the POP

self-liquidated premium

requires a consumer to pay most of the cost of the time received as a premium ex: get a cooler with the purchase of 6 Snapples effective with loyal customers

increase store traffic

retailers increase store traffic through special promotions or events. a promotion that generates a lot of interest within a target audience can drive consumers to retail outlets

obtain initial distribution

sale promotion incentives can help a firm gain initial distribution an shelf placement. members of the trade need a reason to choose a brand over another for shelf space and this can help sway them

managerial time and expense

sale promotions are both costly and time consuming and they take dollars away from advertising

risk with incentive

sales people can be so motivated to get extra money that they may try to sell the brand to every customer whether it fits their needs or not can look like a bribe if not carried out well

stimulating trial purchases in consumers

sales promotion tools can reduce the consumer's risk of trying something new this promotion is trying to get consumers to try a BRAND for the first time-- not the product category

push strategy

sales promotions directed at the trade help push a brand into the distribution channel until it ultimately reaches the consumer

contributing to IBP

sales promotions suggests an additional value, with price reductions, premiums, or the chance to win a prize. this is a different message within the overall communications efforts that a firm can use in its IBP efforts

door to door sampling

samples are brought directly to the homes of a target segment in a well defined geographic area

mail sampling

samples are delivered through the postal service

riding the boards

sending individuals to the site to see if the location is desirable

consumer response to promotions

shoppers are demanding greater value across all purchase situations; they search for extra value in every product purchase and these sales promotions increase the value of a brand in these shoppers' minds

T/F. the purpose of sales promotion changes between the consumer market and the trade and business markets

fales. it does not. its still intended to stimulate demand in the short term and to help push the product through the distribution channel or cause business buyers to act more immediately and positively towards the marketers brand

business gifts

given as part of building and maintaining a close working relationship with suppliers ex: golf balls, jackets, jewelry, NOT extravagant gifts

trial offers

have the same goal as sampling-- to induce trial of the brand-- but they are for more expensive items ex: 90 days or your money back

combating or disrupting competitor's strategies

if a firm knows that one of its competitors is launching a new brand or initiating a new advertising campaign, a well timed sales promotion offering deep discounts or extra quantity can disrupt their strategy

merchandise allowances

in the form of free products packed with regular shipments, are payments to the trade for maintaining and setting up and maintaining displays

directory advertising

includes all the local phone directory and local business advertising books published by a variety of firms ex: yellow pages help people follow through on their decisions to buy by providing information that customers need to actually find a particular product or service

cinema advertising

includes those ads that run in movie theaters before the film and other advertising appearing off screens within a theater

out of home media advertising

includes various advertising venues that reach primarily local audiences combination of transit and billboard advertising backs of buildings, subway tunnels, stadiums, taxis, busses, trucks, etc. especially valuable in metropolitan areas

promotional benefits of packaging

it carries the brand name and logo and communicates the name and symbol to a consumer it can attract the consumer's attention and induce the shopper to examine it more carefully it must create a perception of value for the product through its color, design, shape, etc.

premiums

items offered for free or at a reduced price with the purchase of another item

increase order size

manufacturers prefer that members of the trade maintain large inventories so that the manufacturers can reduce inventory carrying costs when wholesalers and retailers order in bulk, it shifts the inventory burden to the trade channel

mass media advertising vs. sales promotion

mass media is designed to build a brand image over time and sales promotion is designed to make things happen in the short run and is capable of almost instant demand

Point of Purchase Advertising (POP)

materials used in the retail setting to attract shoppers' attention to a brand, convey primary brand benefits, or highlight pricing information requires careful coordination with the marketers' sales force

objectives for promotions in the trade channel

obtain initial distribution increase order size encourage cooperation with consumer market sales promotions increase store traffic

in-store sampling

occurs at the point of purchase and is popular for food and cosmetics

price off deals

offers consumers cents or dollars off merchandise at the POP through specially marked packages the reduction is taken from the manufacturer's profit margin rather than the retailers manufacturers like it because its controllable and good in competition; retailers don't because it causes inventory and pricing problems

free premium

offers the consumer the item for free

trial offers

since many business products and services are high of cost and often result in a significant time commitment to a brand, trial offers provide a way for buyers to lower the risk of making a commitment to one brand over another also a good way to attract new customers who need a good reason to try something new

creating a price orientation

since most sales promotions rely on some sort of price incentive or giveaway, a firm runs the risk of having its brand perceived as cheap, with no real value or benefits beyond the low price

pros of outdoor advertising

size of the display billboards can be captivating offers round the clock exposure especially effective when they reach viewers with a message that speaks to a need or desire that is immediately relevant (ex: fast food on the road)

objectives for consumer market sales promotion

stimulate trial purchases stimulate repeat purchases stimulate larger purchases introduce a new brand combat or disrupt competitor's strategies contribute to Integrated Brand Promotion

legal considerations

the best way to stay out of legal trouble is to carefully and clearly state the rules and conditions related to the program so that customers are fully informed

packaging

the container or wrapping for a product; carries important brand information

proliferation of brands

the drive by marketers to design products for specific market segments to satisfy ever more narrowly defined needs has caused a proliferation of brands that creates a mind dulling maze of consumers where there are 60 brands to choose from they turn to sales promotions to gain attention for their individual brands

frequency programs

the high degree of travel associated with many businesses make frequency programs an ideal form of sales promotion for the business market also used by retailers of business products like Staples or Costco

allowances

the purpose is to increase the attention given to a firm's brands offered to retailers and wholesalers

cooperative advertising (Co-Op)

the sharing of advertising expenses between national advertisers and local merchants also referred to as vertical cooperative advertising and provides dollars directly to retailers for featuring company's brand in local advertising manufacturers try to control the content in specification of the size and content and then ask for verification that its met

sales promotion

the use of incentive techniques that create a perception of greater brand value among consumers, the trade, and business buyers the intent is to generate a short term increase in sales by motivating trial use, encouraging larger purchases, or stimulating repeat purchases

challenges of contests and sweepstakes

there will always be regulations and restrictions from federal and state laws the game may become the main focus and the brand the secondary its hard to get a meaningful message across the risk of errors in administration of the game contradicts any quality or prestigious image

clutter

they use sales promotions to break through clutter and to grab the consumer's attention

the role of sales promotion

to elicit an immediate purchase from a customer group and to offer household consumers, trade buyers, and business buyers an immediate incentive to choose one brand over another used when a firm determines that a more immediate response than advertising can accomplish is needed

stimulating repeat purchases in consumers

to keep consumers loyal to a particular brand loyalty or frequent purchase programs are the best techniques for pursuing this objective

stimulating larger purchases in consumers

to motivate consumers to stock up on a brand, thus allowing firms to reduce inventory or increase cash flow ex: price reductions, two for one sales, (buying 3 12 packs of coke for the price of two)

first poster usage

to tell the war status during the revolutionary war 1800s- used by circuses and politicians

business market sales promotion techniques

trade shows business gifts premiums and advertising specialities trail offers frequency programs

T/F. retailers will look for POP displays as ways to differentiate and provide ambience for their individual stores

true

cons of sampling

unless the brand has a clear value and benefit over the competition, a trial is unlikely to persuade a switch its expensive a firm can never ensure that its reaching the target audience and not just consumers

introducing a new brand to consumers

used because sales promotion can attract attention and motivate trial purchases

gift cards

used by some to introduce their peers to a brand they like the good thing is that the holder tends to use them freely to pay the full retail price of the item, which means retailers and marketers earn higher profit margins from the purchases

permanent long term displays

used for more than six months

short term promotional displays

used for six months or less

support media

used to reinforce or supplement a message being delivered via some other media vehicle

trade-market sales promotion

uses the following ways of motivating distributors, wholesalers, and retailers to stock and feature a firm's brand in their store merchandising programs POP displays, incentives, allowances, cooperative adv., sales training

alienating customers

when a firm relies heavily on sweepstakes or frequency programs to build loyalty among customers, particularly their best customers, there is the risk of alienating these customers with any change in the program

encourage cooperation with consumer market sales promotions

wholesalers may need to maintain large inventories and retailers may need to provide special displays or handling during consumer market sales promotion to achieve synergy, marketers often run trade promotions simultaneously with consumer promotions

advantages to coupons

~gives a discount to a price-sensititve customer while still selling the product at full price to others ~can induce brand switching ~manufacturer can control the timing and distribution of the coupons ~stimulates repeat purchases ~can get regulars to trade up within a brand array and try the premium version

risks with coupons

~timing of redemption can't be controlled ~heavy redemption reduces a firm's profitability ~the cost for production and distribution equal 2/3 of the face value ~coupon fraud (redemption by those who don't purchase the brand, use by the sales clerks, and fake coupons)

slotting fees

a type of trade market sales promotion in which manufacturers make direct cash payments to retailers to ensure shelf space

premiums and advertising specialties

a message placed on a useful item, given free to buyers with no obligation to make a purchase ex: hats, mugs, pens, t shirts, calendars, etc. reminds them of the brand name and adds satisfaction

rebate

a money back offer requiring a buyer to mail in a form requesting the money back from the manufacturer rather than from the retailer usually tied to multiple purchases few take advantage which results in an extra $2 million in revenue for the manufacturers and retailers

sweepstakes

a promotion in which winners are determined purely by chance ex: scratch off cards, drawings

advertising specialties

a sales promotion having 3 key elements: ~a message placed on a useful item ~given free to consumers ~given with no obligation to make a purchase ex: hats, mugs, pens, t shirts, calendars, etc.

sampling

a sales promotion technique designed to provide a consumer with an opportunity to use a brand on a trial basis with little or no risk very favorable with customers can be used on new products or ones with weak market share

on package sampling

a sample item is attached to another product package

consumer market sales promotion

a type of sales promotion designed to induce household consumers to purchase a firm's brand rather than the competitors can be either price promotions or not ex: coupons, price off deals, contests, samples, rebates, etc.