This document provides an overview of sales promotion concepts from a textbook. It includes definitions of sales promotion, examples of different promotion techniques like premiums and coupons, and objectives of various promotion types. It also discusses challenges like overreliance on promotions, misredemption of coupons, and the "sales promotion trap" where constant discounting reduces brand value.
2. 2
Promotional Strategy
MKT4230
2
Sales Promotion
This is the definition of sales promotion:
Textbook
Page 520 - 521
A direct inducement that offers an extra value or
incentive for the product to the sales force, distributors,
or ultimate consumer with the primary objective
of creating an immediate sale.
4. 4
Promotional Strategy
MKT4230
4
Sales Promotion Vehicles
These are the types of promotion vehicles that are used for consumer- and trade-oriented
promotions.
Textbook
Pages 521 / Figure 16 - 1
Samples
Coupons
Premiums
Contests/sweepstakes
Refunds/rebates
Bonus Packs
Price-off deals
Frequency programs
Cooperative advertising
Trade allowances
Sales training programs
Contests, incentives
POP displays
Trade shows
Consumer-OrientedTrade-Oriented
Event marketing
5. 5
Promotional Strategy
MKT4230
5
Media Often Delivers a Promotion Message
This visual shows a print ad for Channel Lock that promotes the “Football Challenge
Sweepstakes.
Textbook
Page 510 – 511 / Exhibit 16 - 2
Football challenge
sweepstakes, referral
to website
6. 6
Promotional Strategy
MKT4230
6
Reasons for Sales Promotion Increases
This is a summary of the reasons for growth in sales promotion.
Textbook
Pages 523 - 527
Declining brand loyalty
Increased promotional sensitivity
Brand proliferation
Fragmented consumer markets
Short-term focus of marketers
Increased accountability
Competition
Clutter
Growing power of retailers
7. 7
Promotional Strategy
MKT4230
7
Sales Promotion Concerns
These are some of the perceived negative impacts of sales promotions.
Textbook
Page 527
• Negative impact of sales promotions
– Fewer dollars to build brand equity
– Encourages consumers to purchase on the basis of price
– Detracts from the value of the brand
9. 9
Promotional Strategy
MKT4230
9
Nonfranchise-Building Promotions
This chart introduces nonfranchise building promotions.
Textbook
Page 530
Accelerate the purchase
decision process
Generate an immediate sales
increase
Objectives
Do not identify unique brand
features
Do not contribute to brand
identity or image
Limitations
10. 10
Promotional Strategy
MKT4230
10
Objectives of Consumer-Oriented Promotions
These are the objectives companies hope to achieve by using consumer-oriented sales
promotions.
Textbook
Pages 530 - 533
Increase consumption of an
established brand
Target a
specific segment
Enhance IMC efforts and build
brand equity
Defend (maintain) current
customers
Obtain trial
and purchase
12. 12
Promotional Strategy
MKT4230
12
Sampling
These are the conditions under which sampling works best.
Textbook
Page 533 - 534
The products are of
relatively low unit
value
The product can be
broken into a small piece
or size that reflects the
full features and benefits
The purchase cycle is
relatively short
Sampling Works Best When
14. 14
Promotional Strategy
MKT4230
14
Sampling Methods
These are the various ways in which samples may be distributed.
Textbook
Pages 534 - 535
Door-to-door
Direct mail
In-store
On package
Events
Newspaper/magazine insert
Other methods
Methods
15. 15
Promotional Strategy
MKT4230
15
Sampling
These are the three criteria for an effective sampling program.
Textbook
Pages 534 - 535
Products are of
relatively low unit value,
so samples don’t cost
much
Products are divisible and
can be broken into small
sizes that reflect the
products features and
benefits
Purchase cycle is
relatively short so the
consumer can soon
purchase again
Sampling Works Best When
16. 16
Promotional Strategy
MKT4230
16
Samples are Often Distributed with Newspapers
This is an example of a collateral piece from the media kit of the San Diego Union Tribune
newspaper promoting the use of polybags to distribute samples.
Textbook
Pages 535 - 536
17. This visual shows how Armour All uses on-package sampling for its automotive care
products.
17
Promotional Strategy
MKT4230
17
Armour All Uses On-Package Samples
Textbook
Page 531 / Exhibit 16 - 11
18. 18
Promotional Strategy
MKT4230
18
Couponing
This slide introduces coupons as a sales promotion tool.
Textbook
Page 536
Nearly
240 billion
distributed each
year in the US
The
oldest and
most widely used
sales promotion tool
85% of
consumers
use coupons;
21% use them
regularly
19. 19
Promotional Strategy
MKT4230
19
Pros and Cons of Coupons
This chart presents the advantages and disadvantages of coupons.
Textbook
Pages 536 - 538
Advantages Disadvantages
Appeals to price sensitive consumers
Can offer discounts without retailer
cooperation
Effective way to induce trial of
products
Defends market share and
encourages repurchase
Often used by loyal consumers who
would purchase anyway
Misredemption
and fraud
Hard to tell how many consumers
will use them and when
Low redemption rates and high costs
21. 21
Promotional Strategy
MKT4230
21
Coupon Misredemption and Fraud
These are some of the ways in which coupon misredemption or fraud occurs:
• Customer redemption for a product or size not specified on the coupon
• Salesclerk redemption of coupons for cash
• Store managers gathering and redeeming coupons without the accompanying sale
• Criminals gather or print coupons and sell them to unethical merchants
• Web-source fraud, whereby coupons are produced and distributed online
Textbook
Pages 537 - 538
22. 22
Promotional Strategy
MKT4230
22
Coupon Distribution
These are the various ways in which coupons are disseminated to consumers:
• In order of usage
• Freestanding inserts (86%)
• In-store couponing (6%)
• Direct mail (2%)
• Magazines (2%)
• Newspapers (1%)
• Coupons inside/outside product (1%)
• Other methods (2%)
Textbook
Pages 538 - 540
23. 23
Promotional Strategy
MKT4230
23
FSIs are the Most Popular Coupon Type
This visual shows a Free Standing Insert type of coupon used by Chicken of the Sea to
promote various seafood products.
Textbook
Pages 538 - 539
26. 26
Promotional Strategy
MKT4230
26
Types of Coupons
These are the types of coupons that are available for in/on-pack and in-store use.
Textbook
Pages 540 - 541
In-Store
Tear-off pads
Handouts
Dispensers
Register printout
In/On-Pack
Bounce-back
Cross-ruff
Instant
29. 29
Promotional Strategy
MKT4230
29
Premiums
This chart defines premiums and differentiates between free and self-liquidating premiums.
Textbook
Page 542 - 544
An offer of an item, merchandise, or service, free or at a low
cost, that is an extra incentive for customers
Types of Premiums
Free
Only requires purchase of the
product
Self-liquidating
Consumer required to pay some or
all of the cost of the premium
30. 30
Promotional Strategy
MKT4230
30
Airline Miles are a Popular Incentive
This visual shows a trade ad from American Airline’s AAdvantage Marketing Programs.
Textbook
Pages 542 - 544 / Exhibit 16 - 18
31. 31
Promotional Strategy
MKT4230
31
More Consumer-Oriented Promotions
These are additional types of consumer-oriented promotions.
Textbook
Page 545 - 553
Contests and sweepstakes
Refunds and rebates
Bonus packs
Price-off Deals
Loyalty programs
Event marketing
32. 32
Promotional Strategy
MKT4230
32
Infomercials and Home-Shopping
Contests and sweepstakes are an increasingly popular consumer-oriented promotion. There
are differences between contests and sweepstakes as stated.
Textbook
Pages 545 - 553
Sweepstakes
Contest
Promotion where winners are determined purely by chance
Winners chosen by random selection from pool of
entries or generation of a number to match those
held by game entrants
Consumers compete for prizes or money on the basis of skills
or ability
Winners determined by judging entries or ascertaining which
entry is closest to predetermined criteria
Cannot require proof of purchase as a condition for entry
33. 33
Promotional Strategy
MKT4230
33
Trade Oriented Promotions
These are the objectives of trade-oriented promotions.
Textbook
Pages 554 - 556
Maintain support for established brands
Encourage display of products
Build retail inventories
Obtain distribution for new products
Objectives
34. 34
Promotional Strategy
MKT4230
34
Types of Trade Oriented Promotions
This chart shows the types of incentives that manufacturers use to get wholesalers and
retailers to treat them, and their products, favorably.
Textbook
Pages 556 - 562
Buying
Promotional
Slotting
POP displays
Sales training
Trade shows
Contests and incentives
Trade allowances
Co-op AdvertisingTypes
35. 35
Promotional Strategy
MKT4230
35
Cooperative Advertising
This is the definition of trade-oriented cooperative advertising and its three forms:
• Trade-oriented cooperative advertising
• The cost of advertising is shared by more than one party
• Forms
• Horizontal
• Ingredient-sponsored
• Vertical
Textbook
Pages 560 - 561
36. 36
Promotional Strategy
MKT4230
36
Types of Cooperative Advertising
These are the various types of cooperative advertising.
Textbook
Pages 560 - 562
Vertical
Cooperative
Advertising
Ingredient-
Sponsored
Coop Advertising
Horizontal
Cooperative
Advertising
Cooperative
Advertising
37. 37
Promotional Strategy
MKT4230
37
Promotion Agencies’ Shifting Role
This is how the role of sales promotion agencies is changing.
Textbook
Page 564 / Figure 16 - 6
Directly accountable
Continuing service
Agency team contact
Creates strategy
One full-service firm
Equal to ad agency
Created tactics
Do single project
Hired for specialty
Single agency contact
Inferior to ad agency
Indirect accountability
Traditional New and Improved
38. 38
Promotional Strategy
MKT4230
38
Coordinating Sales, Advertising, and IMC Tools
This visual introduces the coordination of sales promotions with other IMC tools.
Textbook
Pages 562 - 564
Budget allocation
Coordination of
themes
Media support and
timing
39. 39
Promotional Strategy
MKT4230
39
Sales Promotion Abuse
These are the reasons behind the over-use of sales promotions and the negative impact that
results from it:
Over-use of sales promotions
• Looking for quick sales fixes
• Easier to drop prices than to differentiate your product
Negative impact
• A brand that is constantly promoted may lose perceived value
• Purchases based on discounts, not a favorable attitude
• Sales promotion trap or spiral
Textbook
Pages 564 - 565