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.