adv ch 15

objectives of p-o-p advertising

(goal is to create short term impact on sales while preserving the long term image of the brand being developed and maintained by advertising for the brand) objectives: draw consumers' attention to a brand in a retail setting, maintain purchase loyalty among brand loyal users, stimulate increased or varied usage of the brand, stimulate trial use by users of competitive brands

Volvo incentive example

Volvo national sales manage put together an incentive that the leading dealership in the nation would win a trip to the Super Bowl, including dinner with Lyn Swann

transit advertising

a close cousin to billboard adv., a popular adv. form around the world, can appear on backs of buildings, subway tunnels, sports stadiums and on taxis, busses, and trucks (converse envelops mass transit vehicles) valuable to target mass urban areas (works best for building/maintaining brand awareness)

overhead merchandiser

a display rack that stocks products and is placed above the cash register. the cashier can reach the product for the customer. the front of an overhead merchandiser usually carries signage

dump bin

a large bin with graphics or other signage attached

shelf talker

a printed card/sign designed to mount on or under a shelf

one way to break through clutter is to feature

a sales promotion (coupon, rebate, sweepstakes)

push strategy

a sales promotion strategy in which marketers devise incentives to encourage purchases by members of the trade to help push a product into the distribution channel

counter/shelf unit

a smaller display designed to fit on counters or shelves

research shows that shelf facings have

a strong impact on consumer evaluation particularly among frequent users of a brand and for brands with low market share.

full line merchandiser

a unit that provides the only selling area for a manufacturer's line; often located as an end of aisle display

off invoice allowance

advertisers allow whole sales and retailers to deduct a set amount from the invoice they receive for merchandise. this programs really just a rice reduction offered to the trade on a particular marketer's brand. the incentive is that the price reduction increases the margin and profits a wholesaler or retailer realizes on the off invoiced brand

mobile/banner

an advertising sign suspended from the ceiling of a store or hung across a large wall area

push money

another form of trade incentive; is carried out through a program in which retail salespeople are offered a monetary reward for ft. a marker's brand with shoppers. (if a salesperson sells a particular fridge over the competitors, they will be paid an extra $50/$75 bonus)

cart advertising

any ad message adhered to a shopping cart

motion display

any p-o-p unit that has moving elements to attract attention

floor stand

any p-o-p unit that stand independently on the floor

window and door signage

any sign that identifies or advertises a company/brand or gives directions to the consumer

management must admit that sales promotion

are typically short term tactics designed to reduce inventories, increase cash flow, or show periodic boosts in market share

support media

are used to reinforce or supplement a message being delivered via some other media vehicle. are especially productive when used to deliver a message near the time/place where consumers are actually contemplating product selections, like the billboards along highways advertising gas stations, restaurants and motels.

cooperative (co-op) advertising

as a trade promotion technique is also referred to as vertical cooperative advertising and provides dollars directly to retailers for ft. company's brand in local advertising - also called vendor co-op programs

with hundreds of brand selling the same produt, gaining attention isn't easy

because of this clutter of brands, marketers turn to sales promotions (contests, coupons, premiums, loyalty programs, p-o-p displays) to gain some attention to their individual brand

mass media advertising is designed to ___ while sales promotion is designed to ____

build a brand image over time; make things happen in the short run, particularly with new mobile or location based techniques

stimulate arger purchases

by price reductions or 2 for 1 sales, allows firms to reduce on inventory or increase cash flow

consumer market sales promotion

can either be price promotions or not and include: coupons/e coupons, price off deals, premiums, contests and sweepstakes, sampling and trial offers, rebates, loyalty/frequency programs, gift cards

aerial advertising

can involve airplanes pulling sings/banners, skywriting, or majestic blimps. for several decades goodyear had blimps all to themselves but now the availability of smaller, less expensive blimps, has made this medium more popular to advertise

effective deployment of p-o-p adv. requires

careful coordination with the marketer's sales force. gillette found this out when they realized they were wasting money on lots of p-o-p materials and displays that retailers simply ignored- their marketing execs woke them up to what retailers were/weren't using when they saw that 50% of the shelf signs from different suppliers to diff. stores were going directly into the trash. gillette redesigned and walmart approved these for their stores and put them in store immediately so now gillette tracks its success carefully when it launches a new p-o-p program

interactive unit

computer based kiosk where shoppers get info on recipe tips or how to use a brand, can also be a unit that flames and dispenses coupons

discussion of sales promotion focuses only on

consumer and trade techniques. it's a major oversight to leave the business market out of the discussion

borrowing from future sales

consumers or trade buyers who would have bought 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. this can play nov with the measurement and evaluation of the effect of adv. campaigns or other image building campaigns

advertising specialities can

create awareness and add to the satisfaction of a transaction nonetheless (a sleeve of golfballs probs won't make a buyer choose one firm over the other)

risks associated with sales promotion

creating a price orientation, borrowing from future sales, managerial time and expense, legal considerations.

one of the most successful uses of sales promotion to introduce a brand

curad bandages introducing a kid sized bandage by distributing 7.5 million sample packs in mcdonalds happy meals, actual sales exceeded estimations by over 30%

business marketing 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.

the purpose of sales promotion as a tool

doesn't change from the consumer market to the trade or business markets. it's still intended to stimulate demand in the short term and help push the product through the distribution channel or cause business buyers to act more immediately and positively toward the marketer's brand

from a retailer's perspective a p-o-p display can

enhance the atmosphere of the store and make the shopping experience easier for customers

firms try to retain their most loyal and lucrative customers by

enrolling them in frequency programs; such as airline or hotel industries or loyalty punch cards at coffee shops

coupon

entitles a buyer to a designated reduction in price for a product/service; are the oldest and most widely used sales promotion (groupon is most famous online coupons but they're losing money)

annual expenditures on p-o-p advertising

estimated to be more than $23 billion/year

trade shows

events where several related products from many manufacturers are displayed and demonstrated to members of a trade. every industry has trade shows bc they're an efficient way to reach interested current and potential buyers with the brand at hand for discussion and use

sales promotions directed at members of the trade (wholesalers, distributors, and retailers) and business markets

ex.: Hewitt-Packard designs sales promotion programs for its retailers like best buy in order to ensure that HP line gets proper attention and display but HP will also have sales promotions campaigns aimed at business buyers like accenture or IHC Health Care

advertising specialities

have 3 key elements: a message placed on a useful item, given free to consumers, with no obligation to make a purchase. adv. specialities allow a firm to tout its company or brand name with a target customer in an ongoing fashion. popular adv. specialities are baseball caps, t-shirts, coffee mugs, pens, and calendars.

trail offers

have the same goal as sampling - to induce consumer trial use of the brand- but they are used for more expensive items. ex.: exercise equipment, appliances, watches, hand tools, and consumer electronics. trial offers can be free for low priced or ducts (pet's coffee) or trials can be as little as a day to 90 days for more expensive items like vacuums or computer software.

critical element for achieving IBP

having a sales force that can work with retailers to develop and deliver effective p-o-p programs

frequency programs

high degree of travel associated with business professions makes frequency programs an ideal form of sales promotion for business market. airline, hotel, and restaurant frequency programs by the business market traveler

gift cards

hopefully when a consumer goes to use the gift card they will become frequent users, loyal customers give gift cards to friends to introduce them to something they like.

companies are seeking tactics with short term benefits because

if a customer comes in for a free product, they usually end up buying something (a customer coming for free fries also buys a burger and drink; mcdonalds customers who come in for free coffee usually buy something else)

differences in promotional budgets 1970 vs. now

in 1970- 30% of budgets were to sales promotion with 70% to mass media advertising Now nearly 75% of promotional budgets are big spent on various forms of promotion and p-o-p materials

merchandise allowances

in the form of free products packed with regular shipments are payments to the trade for setting up and maintaining displays. the amounts are far less than the amount manufacturers would have to spend to maintain the displays themselves

sales promotion techniques used within the trade market are

incentives, allowances, trade shows, sales training programs, and cooperative advertising

incentives

include a variety of tactics not unlike those used in the consumer market. awards in the forms of travel, gifts, or cash bonuses for reaching targeted sales levels can induce retailers and wholesalers to give a firm's brand added attention. the incentive doesn't have to be large or expensive to be effective

directory adv.

includes all local phone directory and local business adv. books published by a variety of firms-most well known being yellow pages

cinema adv.

includes those somewhat annoying ads that run in movie theaters before he film and other advertising appearing off screen within the theater (63% of movie goers actually don't mind it) off screen ads include sampling, concession based promotion and lobby based adv.

out of home media advertising

includes various advertising venues that reach primarily local audiences

legal consideration

increase in legal scrutiny in legal and state level. legal experts recommend that before initiating promotions that use coupons, games, sweepstakes, and contests, a firm check into lottery, copyright, states and federal trademark prize notification, right of privacy, and tax laws, and FTC and FCC regulations.

increase store traffic

increase through special promotions or events. ex.: door prize drawings, poking lot sales, or live radio broadcasts from the store. burger king has become a leader in this by hosting special promotions tying to disney movie debuts like beauty and the beast, Pocahontas. manufacturers can also do this. a promotion that generates a lot of interest within a target audience can drive consumers to retail outlets ex.: honda running A SPRING PROMOTION FOR LAWNMOWERS ft. corporate reps at store like lower and home depot, supporting its retailers with special promotions

what products is sampling most useful for

is particularly useful for new products, can be used successfully for established markets with weak market share in specific geographic areas. ex.: Ben and Jerry's "stop and taste the ice cream" gave away millions of scoops of ice cream in urban areas in an establish to reestablish a presence for the brand in weak markets

sale promotion

is 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 till use, encouraging larger purchases, or stimulating repeat purchases

key to the effective use of p-o-p

is to maintain the brand image being developed by advertising

encourage cooperation with consumer market sales promotions

it does a manufacturer little good to initiate a sales promotion in the consumer market if there is little cooperation in the channel. wholesalers may need to maintain larger inventories and retailers may nee to provide special displays/handling during consumer market sales promotion. to achieve synergy marketers often run trade promotions simultaneously with consumer promotions

premiums

items offered free or at a reduced price with the purchase of another item. usually a related product such as a granola bar sample in a granola cereal. service firms like car wash/dry cleaner offer 2 for 1 offers

billboards were first used to

keep civilian population informed about the revolutionary war's status. they became a promotional tool in the 1800's

loyalty programs majority benefit

larger firms more than smaller ones, 73% of online buyers use some sort of lowly card when buying online

illuminated sign

lighted signage used outside or in store to promote a brand or the store

retailers of business products have loyalty programs to reward the loyalty of the customer

like staples, officemax, and costco. costco has teamed with AmEx to offer business buyers a costco/amex credit card - one of the benefits is a rebate at the end of they year based on previous buying of level - the greater the dollar amount the greater the percentage rebate

slotting fees

manufacturers are making direct cash payments to induce food chains to stock an item bc shelf space has become so highly demanded especially in supermarkets

consumers are demanding products at lower prices causing retailers to demand more deals from manufacturers

many of the deals are delivered in terms of trade oriented sales promotions: p-o-p displays, slotting fees, case allowances, and co op advertising allowances. manufacturers use more sales promotions to gain and maintain good relations with the powerful retailers and retailers use the tool of sales promotion as competitive strategies against each other

business gifts

nearly 1/2 of corporate america gives business gifts. gifts are given as part of building and marinating a close working relationship with suppliers. business gifts part of a promotional program are small items like logo golf balls, jackets, small jewelry; extravagant gifts/expensive trips that may be "buying business" are not in this category

retail digital signage

newest p-o-p device available is retail digital signage. video displays that have typically been ceiling or wall mounted and are now being moved to end of aisle caps or given strategic shelf placement to relay special pricing or new product introduction

virgin lightships

now owned/operated by van wagner airship group. has a fleet of small blimps that can be rented for adv.

4 primary objectives of push strategy

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

frequency/continuity programs

offer consumers discounts/free product rewards for repeat purchases or patronage of the same brand, retailer, or company. these were pioneered by airline companies. ex.: frequent flyer programs like Delta's sky miles, frequent stay programs like Marriott's rewards program, and frequent renter programs like Hertz #1 club.

Weiser lock incentive example

offered its dealers a swiss army know with every dozen cases of locks ordered. program was a huge success and a follow up promotion ft. a swiss army watch was a bigger hit

increase order size

one of the struggles in the channel of distribution over the location of inventory. manufacturers prefer for members of the trade maintain large inventories so the manufacturer can reduce inventory carrying costs. members of the trade would prefer frequent, smaller orders with little inventory. sales promotion technique can encourage wholesalers and retailers to order larger quantity, shifting the inventory burden to the trade channel

adv and promotion cannot initiate product category use (in mature products like coffee), but can _______

only affect brand choice among people who already use the product category

traditional support media

outdoor signage, billboards, transit and aerial adv., cinema adv., directory adv., and packaging

why invest so much in in store promotional material?

p-o-p is the only medium that places advertising, brands, and a consumer together in the same place at the same time. research conducted by the trade association p-o-p advertising international indicates that 76% of all product selection involve some financial deliberation by consumers at the p-o-p.

cash register

p-o-p signage or small display mounted near a cash register designed to sell impulse items like gum, lip balm, candy

P-O-P

plays a role at the point of purchase, but is not and can never be the leading tool in IBP. the more complex and info-rich tools of IBP are really what create brand loyalty and competitive advantage

factors creating a short term orientation among managers

pressures from stockholders to increase quarter by quarter revenue and profit per share are one factor

bill back allowance

provide retailers a monetary incentive for featuring a marketer's brand in either advertising or in store displays (marketer requires the retailer to verify the services preformed and provide a bill for the services for ad campaigns and bill backs)

free premium

provides consumers with an items at no cost. the time can be included in a package, received via mail or given at the p-o-p /event (most frequent is an additional package of the original item or a related item like free conditioner pouch with a shampoo bottle)

self training programs

providing training for retail store personnel. this method is used for consumer durables and speciality goods like computers, phones, home theater systems, heat and ac, security systems, and exercise equipment. increased complexity has made it necessary for proper factual info is reaching buyers at p-o-p. at large retail stores manufacturers can hold special classes ft. product info, demonstration and training about special techniques

point of purchase (p-o-p) advertising

refers to materials used in the retail setting to attract shoppers' attention to a brand, convey primary brand benefits, or highlight pricing info. displays may also ft. price off deals or other consumer sales promotions. (cardboard dump bin with attached header is produced for pennies, when the bin is filled with a brand and placed as a freestanding display at retail, sales gain may follow)

promotional products association international

reports that when trade show visitors receive a promotional item from a firm at a trade show booth more than 70% of the visitors remember the name of the company that gave them the item

self liquidating premium

requires a consumer to pay most of the cost of the item received as a premium. these are most effective with loyal customers. ex.: snapple offering a cooler for $6 when you buy a 6 pack of snapple

study on the effects of p-o-p sponsored by k-mart and p&g

research showed that p-o-p adv. boosted the sales of coffee, paper towels, and toothpaste by 567% 773% and 119% respectively - these results show why p-o-p adv. is one of the fastest growing categories in today's marketplace

ROI

return on investment

sales promotion

role is to elicit an immediate purchase from a costumer group (AAA offering a price off deal to those who book though AAA)

digital billboard displays let advertisers

rotate their messages at different times during a day. ex.:fresh direct uses this to change its message for food delivery service morning, noon, and night on the billboard outside queens tunnel

coupons, price reductions, and value seeking do not mean consumers are choosing the lowest priced item

sales promotion techniques act as an incentive to purchase the brand featuring a promotion, even if a lower brand has a lower basic price

risk with incentive programs for the trade

salespeople can be so motivated to win an award or extra push money that they may try to sell the brand to every customer whether it fits that customers needs or not. also a firm must carefully manage such programs to minimize ethical dilemmas bc an incentive technique can look like a bribe unless its carried out in a highly structured and opened fashion

sweepstakes examples

scratch off cards. used by gas retailers, stores and fast food chains so repeated trips to the store are necessary.

2 categories of p-o-p materials

short term promotional displays: used for 6 months or less and permanent long term displays: intended to provide p-o-p presentation for more than 6 months

advertising is a ling term franchise building process that

shouldn't be compromised for short term gains (in reference to funds allocated to sales promotions are taking money away from advertising)

creating a price orientation

since most sales promotions rely on some sort of price incentive/giveaway, a firm runs the risk of having its brand perceived as cheap with no real value or benefits. this perception contradicts the concept of IBP- if adv. messages highlight the value/benefit of a brand only to be contradicted by a price emphasis then a confusing symbol is being sent to the market. chrysler dealers challenged corporate management on this point arguing that escalating price incentives on various vehicles were wrecking the bran

packaging

the container of wrapping for a product (Dean foods milk chug- single serve milk package- created bc milk didn't have a cool factor, milk sales increased along with flavored syrups)

advocates for billboards contend that important technological advances will make outdoor advertising an increasingly attractive alternative in the future

the first offers the prospect of changing what has largely been a static medium to a dynamic medium (ex.: coke has purchased a large LED screens in 27 markets so they can run their own ads 24/7)

glad kitchen bag with free sample

the free sample could attract consumers attention and get them to either try the product for the first time or switch brands

managerial time and expense

the process of sales promotion is costly and time consuming for the marketer and retailer in terms of handling promotional materials and protecting against fraud and waste in the process.

price off deals

the reduction is taken from the manufacturers profit margin rather than the retailers; manufacturers like this bc its controllable, retailers are less enthusiastic because this can create inventory and pricing problems

product introduction fee

the slotting fee for a new brand

obtain initial distribution

there's fierce competition for shelf space because of the proliferation of brands in the shelf market. sales promotion incentives can help a firm gain initial distortion and shelf space. members of the trade need a reason to choose one brand over another for allocating shelf space and a well conceived promotion incentive may sway them

roles of sales promotion, point of purchase advertising, and support media

these offer advertisers a wide range of opportunities to communicate to consumers that are vastly different from traditional mass media or digital media. these work in ways traditional media and digital media don't. these are traditional tools of promotion but they are being adapted quickly to new technologies available for forward thinking IBP campaigns

2 was manufacturers try to control the content of co-op adv.

they may set strict specifications for the size and content of the ad and then ask for verification that such specifications have been met . alternatively, manufacturers may send the template for the ad into which retailers merely insert the names and locations of their stores (Hublot watch ad elements are (inter)national with the co-op sponsorship of the California retailer highlighted, sublet controls look and feel of the ad and insures that the image of the brand is supported)

riding the boards

to assess locations, companies have to send individuals to the site to see if the location is desirable - is a major investment of time and money

best advice for staying out of legal trouble with sales promotions

to carefully and clearly state the rules and conditions related to the program so that consumers are fully informed

sampling

to say its a popular technique is an understatement. surveys have shown customers are very favorable toward sampling with 43% indicating that they would consider switching brands if they liked a free sample that was being offered.

trade shows importance to small firms

trade shows are critically important to small firms that can't afford adv. and has a sales staff too small to reach all its potential customers. through trade shows, salespeople can far more contacts than they could with direct sales calls

techniques used for business buyers are similar to the trade market techniques and include:

trade shows, premiums, incentives, loyalty/frequency programs

why should self liquidating premium be used cautiously

unless the premium is related to a value-building strategy for the brand, it can save to focus consumer attention on the premium rather than on the benefits of the brand. focusing on the premium over the brand erodes brand equity (ex.: if consumers buy a brand bc they're giving away a cool t-shirt for $6 they won't purchase the brand again until theres another greta premium for a low price)

aisle directory

used to delineate contents of a store aisle; also provide space for an adv. message

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, allowing, cooperative adv., sales training

end of aisle display/gondola

usually a large display of objects placed at the end of an aisle - ex.: sale

allowances

various firms of allowance are offered with the purpose of increasing the attention given to a firm's brands. made available to wholesalers and retailers about every 4 weeks during a quarter.

trial offers

well suited to the business market. 1st- since many business products/services are of high cost and often result in a significant time commitment to a brand (products/services with a long life) trial offers provide a way for buyers to lower the risk of making a commitment to one brand over another. 2nd- a trial offer is a good reason to try something new the chance to try a new product for 30 days with no financial risk can be a compelling offer

alienating customers

when a firm lies heavily on sweepstakes or frequency programs to build loyalty among customers, particularly their best customer, there is the risk of alienating these customers with any change in the program. airlines suffered this when they tried to adjust the mileage levels needed for awards in frequent flyer programs, many of the airlines had to give concessions to their most frequent flyers as a conciliatory gesture

marketers have a wide range of choices within the 2 categories of p-o-p materials

window and door signage, counter/shelf unit, floor stand, shelf talker, mobile/banner, cash register, full line merchandiser, end of aisle display/gondola, dump bin, illuminated sign, motion display, interactive unit, overhead merchandiser, cart advertising, aisle directory, retail digital signage

sales promotion is a key component

within an IBP campaign particularly in campaigns seeking short term sales effects