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© 2009 South-Western, a part of Cengage Learning

Chapter 17

Sales Promotion, Point-of-Purchase

Advertising, and Support Media

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Part Five: Integrated Brand Promotion

We have considered the Process, Planning, Preparation, and Placement of advertising and IBP in the first Four Parts of the book

Now we take a detailed look at the full range of IBP tools available to the advertiser

Each of these IBP tools has a unique capability to influence audience perception of a brand

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Sales Promotion--Defined

“Using incentives to create a perception of greater brand value”

Consumer Market sales promotion– Induce household consumers to purchase a firm’s brand

Trade-Market sales promotion– Motivate distributors, wholesalers, and retailers to stock

and feature a brand

Business Market sales promotion– Cultivate buyers in large corporations who make

purchase decisions

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Sales Promotion Examples

Coupons

Price-off deals

Premiums

Contests

Sampling

Sweepstakes

Brand placements

Incentives

Loyalty Programs Trade Shows

AllowancesGift Cards

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Point of Purchase Displays

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Sales Promotion vs. Advertising

Short term demand vs. long term demand

Encourages brand switching vs. brand loyalty

Induces trial use vs. encourage repeat purchase

Promotes price vs. image

Immediate results vs. long term effects

Measurable results vs. difficult to measure

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Importance of Sales Promotion

$300 billion in 2008 Growth rate: 4-8 percent Reasons for growth:

– Demand for accountability– Short-term orientation– Consumer response to promotions– Proliferation of brands– Increased power of retailers– Media clutter

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Objectives for Consumer-Market Sales Promotion

1. Stimulate trial purchase

2. Stimulate repeat purchases

3. Stimulate larger purchases

4. Introduce a new brand

5. Combat or disrupt competitors

6. Contribute to IBP

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Consumer-Market Sales Promotion Techniques

1. Coupons 2. Price-off deals

3. Premiums 4. Contests/sweeps

5. Samples & trials 6. Phone gift cards

7. Brand placements 8. Rebates

9. Frequency programs

10.Event sponsorship

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Coupons

Entitles a buyer to a price reduction for a product or service

Advantages– Give a discount to price sensitive consumer while

selling product at full price to others– Induce brand switching– Timing and distribution can be controlled– Stimulates repeat purchases– Gets regular users to trade up within a brand

array

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Coupons are the most widely used form of consumer sales promotion.

Coupons are the most widely used form of consumer sales promotion.

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Ad in Context Example

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Coupons

Disadvantages– Time of redemption cannot be

controlled– No way to prevent current customers

from redeeming coupons– Coupon programs require costly

administration– Fraud is a serious, chronic problem

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Price-Off Deals

Offers consumer reduced price at point of purchase through specially marked packages

Advantages– Controllable by manufacturer– Can effect positive price comparisons– Consumers believe it increases value

of a known brand Disadvantage

– Retailers believe it creates inventory and pricing problems

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Premiums and Advertising Specialties

Premiums: free or at a reduced price with another purchase

Free premiums provide item at no cost

Self-liquidating premiums require consumers to pay most of the cost of the item

Advertising specialties:– A message placed on a free, useful

item

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Premiums attract attention to a brand and offer the consumer something for free.

Premiums attract attention to a brand and offer the consumer something for free.

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Ad in Context Example

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Contests and Sweepstakes

Contests: consumers compete for prizes based on skill or ability.

Sweepstakes: winners picked by chance Both create excitement and interest But . . .

– Legal and regulatory requirements are complex

– Consumers may focus on the game rather than the brand

– Difficult to get an IBP message across in a game

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Samples and Trial Offers

Sampling: Giving consumer an opportunity to use a brand on a trial basis with little or no risk

Types of sampling– In-store (Costco) – Newspaper– Door-to-door – On-package– Mail – Mobile (on-site)

Trial offers– Used for more expensive items– Consumer tries product for a fixed time

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Phone and Gift Cards

Manufacturers offer either for free or for purchase debit cards– with phone time– or preset spending limits

Examples include offers from Starbucks, Barnes & Noble, and The Gap

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Rebates

Money back offer requiring the buyer to mail a request for money back from the manufacturer

Often tied to multiple purchases

Many consumers fail to bother sending in the rebate request form

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Frequency Programs

Also known as continuity programs

Offers customers discounts or free products for repeat patronage

Common in airline, hotel, and restaurant businesses

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Objectives for Promotions in the Trade Market

Objectives: Uses a “push” strategy: Push the product into the distribution channel to the consumer:

– Obtain initial distribution– Increase order size– Encourage cooperation with

consumer market sales promotions– Increase store traffic

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Trade-Market Sales Promotion Techniques

Incentives: Push money

Allowances: Merchandise allowances, slotting fees, bill-back allowances, off-invoice allowances

Sales Training Programs

Cooperative (Co-Op) Advertising

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Business Market Sales Promotion Techniques

Trade Shows

Business gifts

Premiums and advertising specialties

Trial offers

Frequency programs

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Trial offers are very effective in the business market. Why?

Trial offers are very effective in the business market. Why?

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Ad in Context Example

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Risks of Sales Promotion

Create a price orientation

Borrow from future sales

Alienate loyal customers

Time and expense

Legal considerations

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Point of Purchase (P-O-P) Advertising

Definition– Materials used in the retail setting to attract shoppers’

attention to a brand, to convey primary product benefits, or highlight pricing information.

– Displays may feature “price-off” deals as well.

Objectives for Point-of-Purchase Advertising– Draw consumers’ attention to a brand in the 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.

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P-O-P Advertising and the Trade and Business Markets

Product displays and information sheets encourage retailers to support one distributor or manufacturer’s brand over another.

P-O-P promotions can help win precious shelf space and exposure in a retail setting.

A P-O-P display should be designed to draw attention to a brand, increase turnover, and possibly distribute coupons or sweepstakes entry forms.

To combat losing business to online shopping, retailers are trying to enliven the retail environment, and point-of-purchase displays are one strategy.

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Support Media

Purpose: To reinforce or extend a message being delivered through other media

– Signs, billboards, posters

– Transit

– Aerial

– Specialty

– Directory

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Outdoor Signage and Billboards

Advantages– Wide local

exposure– Captivating– Around-the-clock

exposure– Address an

immediate need or desire

Disadvantages– Message limits– Location affects

impact– Relatively expensive– Criticized by

environmental groups

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Transit Ads

Transit Ads– Urban environments– Demographic segmentation– Timely to purchase– Build brand awareness

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Transit ads can reach a target audience in well defined geographic areas.

Transit ads can reach a target audience in well defined geographic areas.

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Ad in Context Example

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Aerial Ads

Aerial Ads– Blimps increasingly

common– Common at sporting

events– Skies are getting

crowded!– Networks are in

control

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Directory Advertising

Advantages– High acceptance– High availability– Final link to

purchase

Disadvantages– Too many

directories– Long lead times– Limited creativity

New: CD-ROM and Web-based directories

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Web based directories offer convenience and speed.

Web based directories offer convenience and speed.

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Ad in Context Example

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Packaging

Promotional Benefits of Packaging to the Advertiser:

– The package carries the brand name and logo– The package can communicate “value”– The package can communicate “image” and

“quality”

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Packaging highlights the brand name, quality and image.

Packaging highlights the brand name, quality and image.

Ad in Context Example

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When Support Media are More than Support Media

Guerrilla Marketing—”Stunt” promotions

Viral campaigns—Using influencers (Chapter 20)

Special Events—Creating visibility and “affinity” for a brand among a highly select target group

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