CE Chapter 21 (?): Sales Promotions- Trade & Consumer

sales promotions CANNOT compensate for what 2 things?

a poorly trained sales force or a lack of advertising

Off Invoice Allowances

a promotional discount offered to retailers or wholesalers whereby a certain per-case amount or percentage is deducted from the invoice- they are given a discount on their purchase

what are in-store circulars?

Weekly ads in which a store places selected items that are sold at a lower price than what you would normally see on the shelves in hopes of bringing in more consumers to purchase those products while they're shopping.

endcaps

a display of products placed at the end of an aisle in a store. They are a type of in-store retail promotion

are retailer's saving from forward buying passed on to consumers in the form of lower prices?

nope/ kept as a boost to their profit margins; consumer cost stays the same

the most popular type of trade allowance is what?

off-invoice allowance

Deals offered periodically to trade that permit wholesalers and retailers to deduct a fixed amount from the invoice are known as...........

off-invoice allowances

name some examples of trade allowances

off-invoice allowances bill-back/merchandising allowances slotting allowances

advertising specialties

A free, useful item with a message printed on it, usually of a logo, brand name, or organization name

list the main problems with sampling.

-expensive! -mishandling in distribution -distributed in the wrong market -in-package samples do not capture non-consumers -fails to reach sufficient # of customers to justify its expensive -may be misused by customers

When should sampling be used?

-when the brand is superior and has distinct relative advantages -when the concept is difficult to communicate by advertising alone -when the company can afford to generate consumer trial quickly

slotting allowance

A fee paid by a manufacturer to a retailer in exchange for agreeing to place a manufacturer's products on a retailer's valuable shelf space

bill-back (merchandising) allowances

A monetary incentive for featuring a manufacturer's brand in either advertisements or special in-store displays

Rebates- what are they? are they usually tied to single or multiple purchases?

A money-back offer requiring the buyer to mail a request for money back from the manufacturer -usually tied to multiple purchases -many consumers fail to send the request

what is a trade allowance?

A price reduction offered by manufacturers to intermediaries such as wholesalers and retailers

sampling

A promotional program that allows the consumer the opportunity to try a product or service for free; delivers an actual or trial-sized product to consumers -generates trial usage!

forward buying

A retailer's stocking up on a product when it is discounted and buying smaller amounts when it is at list (normal) price

self-liquidating premium

A sales promotion that requires consumers to pay most of the cost of the item received as a premium ex: free makeup bag- just pay shipping & handling costs

what are frequency programs?

A type of sales promotion that offers consumers discounts or free product rewards for repeat purchase or patronage of the same brand or company.

what are price-off deals?

Deals that offer consumers a reduced price at the point of purchase through specially marked packages, displays, etc.

when retailers receive trade allowances from manufacturers, do they pass along these discounts to consumers?

No- usually they just keep the profit margin for themselves

what is diverting? who benefits from it?

Occurs when a manufacturer restricts a deal to a limited geographical area rather than making it available nationally. Retailers then buy abnormally large quantities at the deal price and then sell off the excess quantities in other higher-priced geographical areas (retailers benefit from the small profit margin they make through reselling the product)

Couponing

Promotional devices that provide cents-off to consumers upon redemption

what are the differences between sales promotions and advertising?

ST vs LT demand brand switching vs brand loyalty trial vs. repeat purchase promote price vs image immediate results vs LT effect measurable results vs. difficult to measure

advantages of price off deals? disadvantages of price off deals?

adv= controllable my the manufacturer, can effect positive price comparisons, consumers believe in increases value of a known brand disadv= retailers believe it creates inventory and pricing problems

"walking advertisements" refer to. what promotional tool?

advertising specialties

continuity/frequency programs are most common in what 3 businesses?

airline, travel & restaurant businesses

what is a sales promotion?

any incentive that is additional to the basic benefits provided by the brand and temporarily changes its perceived price or value

why do retailers use trade allowances?

as an opportunity to increase their profit margin and boost their bottom line

when retailers receive allowances for featuring the manufacturer's brand in advertisements or for providing special displays, we call this what?

bill-back/merchandising allowances

with both contests & sweepstakes, what are the potential downsides?

consumers may focus on the game rather than the brand, and it is often difficult to get an IMC message across in a game

Contests and Sweepstakes- what is the difference?

contests= consumers compete for prizes based on skill or ability sweepstakes= winner are picked by random

frequency programs are also known as what?

continuity or loyalty programs

free premiums provide an item at no _______

cost

what is it called when retailers purchase enough products on a deal to carry them over until the manufacturer's next regularly scheduled deal?

forward buying

coupons can be distributed via........

freestanding inserts (have very low redemption rates) direct mail or cooperative coupon programs on-pack POP (point-of-purchase) scanner delivery coordination with print media online

punch cards and sponsored credit cards are both examples of........

frequency/continuity programs

sales promotions can stimulate sales for a new, _________, or mature product

improved

sales promotions can __________ sales of a mature brand

invigorate

Premiums

items that are offered free or at a reduced price to people who have purchased a product

both contests and sweepstakes create excitement & interest. However, the ___________ and ______________ requirements are complex.

legal & regulatory

sales promotions CANNOT give consumers any compelling ________ ____________ reason to continue purchasing the brand

long-term

forwards buying causes manufacturers to experience ______________ margins and retailers to experience _______________ margins

man--> reduced margins retailers--> increased margins

bill-back allowances are also called?

merchandising allowances

floor talk

messages or ads on the store floor designed to promote products or brands

"free tote bag with a $50 american eagle purchase" is called a.....

premium

retailers believe that what kind of deal creates inventory and pricing problems?

price-off deals

sales promotions CANNOT permanently stop an established brand's declining ____________ or change the non-acceptance of an _____________ product

sales undesired

sales promotions can be used to target which three groups?

sales force retailers consumers

sampling has what relation with ROI?

sampling has a positive ROI evaluation. -Assessment of cost relative to converters needed for profitability

what are "freestanding inserts (FSIs)"?

sheets of coupons distributed in newspapers, primarily on Sunday

sales promotions are __________ ___________ oriented and capable of influencing behavior because they offer buyers superior ____________ and can make them feel better about the buying experience

short-term value

shelf talkers

signs attached to a shelf (usually sticking out) that let the consumer take away some piece of information or a coupon

____________ allowances are typically paid for by a manufacturer to get its new brands accepted by retailers

slotting

what type of allowances have been questioned by some as a form of bribery or discrim. against smaller businesses/brands?

slotting allowances

sampling is usually ____________ through direct mail, newspapers/magazines, door-to-door, in-pack, in high-traffic locations, in-store, or via the Internet

targeted

why do manufacturers use trade promotions?

to advance their brands' sales and profit performance

why use consumer promotions? because promotions can accomplish goals that advertising by itself cannot.

true! consumers need to be encouraged to buy now rather than later, choose your particular brand over a competitors, and buy more overall and buy more frequently

name some things that sales promotions can do

•Stimulate sales force enthusiasm for a new, improved, or mature product •Invigorate sales of a mature brand •Facilitate the introduction of new products to the trade •Increase on- and off-shelf merchandising space •Neutralize competitive advertising and sales promotions •Obtain trial purchases from consumers •Hold current users by encouraging repeat purchases •Increase product usage by loading consumers •Preempt competition by loading consumers •Reinforce advertising