Chapter 15

Coupon

- entitles a buyer to a designated reduction in price for a product or service

Trade shows

- events where several related products from many manufacturers are displayed and demonstrated to members of a trade - Effective because product can be seen, used and discussed right there

merchandise allowances

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

Introduce a new brand

- Ex- Curad bandages in McDonald's Happy Meals

Combat or Disrupt Competitors' 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 the competitors' strategy

contests and sweepstakes

- In a contest, consumers compete for prizes based on skill or ability. - A sweepstakes is a promotion in which winners are determined purely by chance - challengesmessage of brand becomes secondary adn administering contest is challenging

Stimulate Repeat Purchases

- In-package coupons good for the next purchase, or the accumulation of points with repeated purchase, can keep consumers loyal to a particular brand

gift cards

- Manufacturers or retailers offer either free or for-purchase debit cards that provide the holder with a preset spending limit.

Stimulate Larger Purchase

- Price reductions or two-for-one sales can motivate consumers to stock up on a brand, thus allowing firms to reduce inventory or increase cash flow

Contribute to Integrated Brand Promotion

- Sales promotion adds another type of communication to the marketing mix - Suggests an additional value, with price reductions, premiums or the chance to win a prize, which is a different message within the overall communications effort used in IBP

Stimulate Trial Purchase

- When a firm wants to attract new users, sales promotion tools can reduce the consumer's risk of trying something new - A reduced price, offer of a rebate, or a free sample may stimulate trial purchase

frequencey

- also referred to as continuity programs or loyalty card programs, offer consumers discounts or free product rewards for repeat purchase or patronage of the same brand, company, or retailer - benefit larger firms more than smaller firms in highly competitive markets

Consumer market sales promotion

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

Push money

- carried out through a program in which retail salespeople are offered a monetary reward for featuring a marketer's brand with shoppers

Transit advertising

- close cousin to billboard advertising, often used in tandem with billboards - eg. backs of buildings, subway tunnels, etc

Packaging

container or wrapping for a product "last five seconds of marketing," "the moment of truth"

off-invoice allowance

in which advertisers allow wholesalers and retailers to deduct a set amount from the invoice they receive for merchandise

Out-of-home media advertising

includes various advertising venues that reach primarily local audiences

Aerial advertising

involve airplanes pulling signs or banners, skywriting, or those majestic blimps

Premiums

items offered for free, or at a reduced price, with the purchase of another item - Free premium: no cost, included in a package of the purchased item, mailed to consumer after proof of purchase or simply given away at POP - A self-liquidating premium requires a consumer to pay most of the cost of the item received as a premium. - Advertising specialties have three key elements: a message placed on a useful item, given free to consumers, with no obligation to make a purchase.

slotting fees

- In recent years, shelf space has become so highly demanded, especially in supermarkets, that manufacturers are making direct cash payments, known as slotting fees , to induce food chains to stock an item

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 - Techniques are similar to trade-market techniques and include the following: ♣ Trade shows ♣ Premiums ♣ Incentives ♣ Loyalty/frequency programs

P-O-P - point of purhcase advertising

- is the only medium that places advertising, brands, and a consumer together in the same place at the same time - materials used in the retail setting to attract shoppers' attention to the brand, convey primary brand benefits, and highlight pricing information

rebates

- money-back offer requiring a buyer to mail in a form (although many are redeemed instantly at checkout) requesting the money back from the manufacturer rather than from the retailer

Price-off deal

- offers a consumer cents or even dollars off merchandise at the P-O-P through specially marked packages - Manufacturers like the price off technique because it is controllable - Retailers are less enthusiastic about this technique. Price-off promotions can create inventory and pricing problems for retailers

Outdoor Signage and Billboard Advertising

- oldest form of advertising - advantages: size, accesses local mrket, around the clock exposure

Bill-back allowances provide

- retailers a monetary incentive for featuring a marketer's brand in either advertising or in-store displays

sampling and trial offers

- trial: Can be free or offered for as little as a day long to 90 days - Sampling is expensive

Sales promotions

- use of incentive techniques that create a perception of greater brand value among consumers, the trade, and business buyers - Sales promotion encourages more immediate and short-term responses, whereas the purpose of advertising is to cultivate an image, loyalty, and repeat purchases over the long term.

Support media

- used to reinforce or supplement a message being delivered via some other media vehicle - Especially productive when used to deliver a message near the time or place where consumers are actually contemplating product selections

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: o P-O-P displays o Incentives o Allowances o cooperative advertising o sales training

Objectives for Promotions in the Trade Channel

1) Push strategy 2) obtain initial distribution 3) increase order size 4) Encourage Cooperation with Consumer-Market Sales Promotions 5) Increase Store Traffic

Two Types of POP Advertising and Displays

1) Short-term promotional displays: 6 months or less 2) Permanent long-term displays: intended to provide POP presentation for more than 6 months

Objectives for Consumer-Market Sales Promotion

1) Stimulate Trial Purchase 2) Stimulate Repeat Purchases 3) Stimulate Larger Purchase 4) Introduce a New Brand 5) Combat or Disrupt Competitors' Strategies 6) Contribute to Integrated Brand Promotion

5 primary advantages to coupons

1) The use of a coupon makes it possible to give a discount to a price-sensitive consumer while still selling the product at full price to other consumers. 2) The coupon-redeeming customer may be a competitive-brand user, so the coupon can induce brand switching. 3) A manufacturer can control the timing and distribution of coupons. This way a retailer is not implementing price discounts in a way that can damage brand image. 4) A coupon is an excellent method of stimulating repeat purchases. Once a consumer has been attracted to a brand, with or without a coupon, an in-package coupon can induce repeat purchase. 5) Coupons can get regular users to trade up within a brand array. For example, users of low-priced disposable diapers may be willing to try the premium version of a brand with a coupon

Consumer-Market Sales Promotion Techniques (7)

1) coupons 2) price off deals 3) premiums 4) contests and sweepstakes 5) sampling and trial offers 6) gift cards 7) rebates frequencey

Trade-Market Sales Promotion Techniques (4)

1) incentives: awards in the form of gifts, trave, etc. 2) allowances 3) self training programs: eg for new computers 4) Cooperative (Co-Op) Advertising

4 primary disadvantages to coupons

1) timing of redemption cannot be controlled with regards to customer usage. Some consumers redeem coupons immediately; others hold them for months. 2) Heavy redemption by regular brand buyers merely reduces a firm's profitability. 3) The cost for handling, processing, and distribution of coupons is typically equal to about two-thirds of the face value of the coupon. 4) Fraud is a chronic and serious problem in the couponing process.

Cinema advertising

ads run in movie theaters before the film and other advertising appearing off screen within a theater

Directory advertising

all the local phone directory and local business advertising books published by a variety of firms—the most well known being the Yellow Book

Cooperative (Co-Op) Advertising

provides dollars directly to retailers for featuring company's brand in local advertising

Push strategy

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