Chapter 17Promotions

CHAPTER CONTENT

Chapter key points

1. What are the current trends and practices in planning promotions?2. What are the tools of consumer promotion and how are they used?3. What are the types and purposes of trade promotions?4. How do multiplatform promotions - sponsorships and events, loyalty programs, and partnership programs - work?5. What are the critical promotional practices in integration?

Chapter Overview

This chapter is about the fun, creative, and exciting ideas that the promotion industry uses to spur action and build strong brand relationships. This chapter explains the difference between consumer and trade promotions, as well as other programs, such as loyalty programs, tie-ins, and sponsorships that integrate advertising, public relations, and promotion efforts.

Chapter outline

why sales promotion?

When a marketer increases the value of its product or brand by offering an extra incentive to purchase it, the marketer is creating a sales promotion. In most cases, the objective of sales promotions is to encourage action by adding value to the brand. Also called marketing at the retail level, sales promotion works with other aspects of the marketing mix to motivate consumer action and maximize the marketing investment.

The professional sales promotion industry, with annual revenues of about $12 billion, is estimated to include some 8,000 companies representing advertising and large marketing firms that specialize in sales promotion, such as Carlson Marketing.

The Promotion Marketing Association (PMA) is the professional organization serving this industry. Founded in 1911, the organization promotes excellence in promotion marketing and showcases such practices in its Reggie Awards programs. Although the breadth of the industry has exploded with the new opportunities provided by the Internet, a simple definition identifies the key elements of promotion marketing as follows:

The media and non-media marketing pressure applied for a predetermined, limited period of time at the level of consumer, retailer, or wholesaler in order to stimulate trial, increase consumer demand, or improve product availability.

By further examining this definition, we see that: 1) it acknowledges that consumers are an important target for promotions, but so are other stakeholders, 2) media are carriers of a message that motivates the target and that media can be nontraditional or even human, such as sales staff, and 3) sales promotions are a set of techniques prompts members of three target audiences, i.e., consumers, sales reps, and the trade, to take action, preferably immediate action.

Sales promotion affects demand by offering an incentive to act, usually in the form of a price reduction, but it also may offer an additional amount of product, cash, prizes and gifts, premiums, special events, and so on.

Principle: Sales promotion is primarily designed to affect demand by motivating people to act.

Why Is Sales Promotion Growing? In many marketing savvy companies, sales promotion budgets are larger than advertising budgets. Until the early 1980s, advertising was the dominant player, but during that decade more marketers found themselves driving immediate bottom-line responses through the use of sales promotion.

Accountability In terms of the need for accountability for marketing communications efforts, most U.S. companies focus on immediate profits, a drive that sales promotion satisfies. Because the benefits of advertising are often more apparent in the long term, companies invest more money in sales promotions because they want quick results. Product managers are under pressure to generate quarterly, or even monthly or weekly, sales increases. The pressure for short term profits leads to bigger sales promotion budgets.

Another aspect of accountability is result driven. Sales promotions are relatively easy to evaluate in terms of their impact on sales and whether a sales promotion strategy has accomplished its objectives. Because promotions operate in a finite time frame and deliver action, it is relatively easy and quick to evaluate their success because there is usually an immediate response of some kind.

It is also easier to compute a return on investment (ROI) for promotions than for advertising. This process, known as payout planning, means that the results derived from a promotion can be estimated and compared to the projected costs of the effort. If the promotion does not deliver more than it costs, it is not a good idea, at least financially. While there may be other reasons for conducting a promotion, the go/no-go decision is based on the efforts ROI.

Media Shifts Advertisers also cite other economic reasons for the shift. Traditional media costs have escalated to the point where alternative types of media must be considered. As networks have raised their advertising prices, their share of prime-time television viewers has dropped dramatically. The proliferation of media and competition for audiences attention also factor into the need for accountability. Advertisers, therefore, are exploring marketing communication forms that cost less and produce immediate, tangible results. Sales promotion can deliver these results.

Global incentive programs are also experiencing explosive growth, and much of that relates either to IMC or changes in global media. Some of the reasons for this growth include the interest of multinational corporations in aligning all units with corporate goals, increasing bottom line efficiency, and taking advantage of the rise of the Internet.

Marketplace Changes Other reasons for the move to sales promotion match changes in the marketplace such as these:

Consumer behavior: Shoppers today are better educated, more selective, and less loyal to brand names than in the past, which means they are more likely to switch brands.

Pricing: Consumers have come to expect constant short-term price reductions, such as coupons, sales, and price promotions.

Market share: In most industries, the battle is for market share rather than general product growth. Sales promotion encourages people to switch products, thus increasing market share.

Parity products: Sales promotion is often the most effective strategy for increasing sales of a parity product when the products in the category are largely undifferentiated. When products are similar, promotions become the tiebreaker in the consumers decision making.

The power of the retailer: Dominant retailers, such as Safeway, Wal-mart, ToysRUs, and Home Depot demand a variety of promotional incentives before allowing products into their stores.

From the consumers perspective, sales promotion reduces the risk associated with a purchase by giving them something of added value, such as a coupon, rebate, or discounted price.

Principle: Sales promotion reduces the risk of trying a new product by giving something of added value to motivate action.

Sales Promotion PlanningSimilar to advertising and other marcom areas, promotions are developed with a plan, sometimes called a creative brief. This summarizes the usual planning decisions, such as the SWOT, brand positioning strategy, promotional objectives, targeting and consumer insights, budget, scheduling and timing.

Promotional Objectives As part of any integrated program, sales promotion has different functions than other marcom tools. Advertising is usually viewed as a longer-term investment, since it builds brand equity by establishing a consistent image or feeling about the brand over time. In contrast, sales promotions are more immediate, involving a finite time period. In return for taking action, sales promotions offer consumers something more tangible.

Many of the reasons for using sales promotion focuses around new product launches and how sales promotions can deliver trial. Sales promotion can make consumers more brand aware and generate trial as well as persuade them to buy the product again once they have tried it. It can push the product through the distribution channel by generating positive brand experiences among resellers and buyers. It is also good building traffic for a retailer.

Promotions can also build a brand over time by reinforcing advertising images and messages. Promotions can create an affinity between brands and buyers by creating brand involvement and positive experiences that people associate with the brand. When used for brand building, the primary objective in most marketing communication programs is to build brand awareness as well as drive behavior.

Promotions are not effective in achieving all marketing objectives. For example, promotions cannot do much to change negative attitudes toward a product, overcome product problems, or reposition a brand.

The Issue of Brand Building For years, a heated debate has focused on sales promotion and brand building. Advertisers claim the strength of advertising is creating and maintaining brand image and the price deals emanating from sales promotions negate all of their hard work by diverting the emphasis from the brand to the price. The result, sales promotions critics claim, is a brand-insensitive consumer.

Too many marketers no longer adhere to the fundamental premise of brand building, which is that brand franchises are not built by cutting price but rather by offering superior quality at a reasonable price and clearly communicating that value to consumers, according to a Procter and Gamble manager.

The problem is that brand building is a long and time-consuming process of establishing the brands core values. Promotion is relatively short term and can undermine the brands established values if not handled carefully.

Sales promotion experts argue that their practices can help to build brand image. They refer to the many loyalty programs that have been used by rental car companies, hotels and airlines to enhance their image. They also acknowledge that continuous price promotion does not work well with brand building.

According to one industry expert, the solution to the debate is to make advertising more accountable and promotion more brand focused. In other words, advertising and promotion need to work more closely together, and greater integration is needed when planning marketing communication programs.

The Primary Sales Promotion Targets The most common sales promotion strategies target the three audiences of promotions: consumer, trade, and sales force. The first two - customer sales and trade support - have direct implications for advertising and marketing communication. The third category - sales force promotions - is also important in building trade support.

The third category, sales force promotion, is also important in building trade support. Sales force promotions include two general sets of activities. The first set of activities includes programs that better prepare salespeople to do their jobs, such as sales manuals, training programs, sales presentations, and supportive materials. The second set of activities deals with promotional efforts or incentives for retailers to use as in-store promotions and other programs that motivate salespeople to work harder, such as contests.

Estimating Performance Because promotions are so focused on action, it makes sense that sales are the primary measure of their effectiveness. Response rate is also important to sales promotions, as are redemption rates.

An important dimension of sales promotion effectiveness is payout planning. The goal of creating a payout plan is to produce promotions that increase sales and profits. Needless to say, a promotion should not cost the company more money than it brings in. The trade press is full of stories about poorly designed or performing promotions. Such failures hurt companies reputations, waste money, and sometimes even hurt customers.

Promotional Big Ideas From this document promotional planners develop their ideas. In fact, a Big Idea is just as important for sales promotion as it is for advertising. In many cases, the promotion is part of a bigger integrated marketing communication plan, and therefore one of the requirements is that the promotions Big Idea must support the campaigns creative idea.

The challenge is to come up with exciting and interesting promotional ideas that are involving and capture the attention of the target market, and that includes consumers as well as trade partners in the industry.

Consumer Promotions Although trade promotion claims the greatest percentage of the promotion budget, most people are more familiar with consumer promotions. Consumer sales promotions are directed at the ultimate user of a good or service. They are intended to provide an incentive so that when consumers go into a store they will look for a particular brand. The primary strengths of consumer sales promotions are their variety and flexibility.

Principle: Consumer promotions provide an incentive so consumers will look for a particular brand.

Tools of Consumer PromotionsFollowing is a summary of common types of consumer promotions:

Price deals. A popular sales-promotion technique is a price deala temporary price reduction or a sale price, or even freebies. Freebies, however, can be killers if the company does not adequately predict the consumer response. One result of price deals can be price wars. There are four common price deals:

1. A cents-off deal is a reduction in the normal price charged for a good or service (for example, was $1,000, now $500, or 50 % off) announced at the point of sale or through mass or direct advertising.

2. Prize-pack deals provide the consumer with something extra through the package itselfa prize in a cereal box, for instance.

3. Bonus packs contain additional amounts of the product free when consumers purchase the standard size at the regular price.

4. Banded packs are more units of a product sold at a lower price than if they were bought at the regular single-unit price. Sometimes the products are physically packaged together, such as bar soap and six-packs of soft drinks.

Refunds and rebates. A refund or rebate is a marketers offer to return a certain amount of money to the consumer who purchases the product. Sometimes the refund is a check for a certain amount of money, while at other times it may be a coupon to encourage repeat use.

Sampling. Allowing the consumer to try the product or service is called sampling. Advertisers can distribute samples to consumers in numerous ways. Sampling tables, particularly for food products, can be set up in stores. Small samples of products can show up with newspapers, on house doorknobs, in doctors and dentists offices, and, most commonly, through the mail. Advertisers can design ads with coupons for free samples, place samples in special packages, or distribute samples at special in-store displays.

Product samples influence consumers more than other types of in-store promotions, according to one survey. Sampling is not just an in-store activity. It has also become a mainstay of interactive promotions on the Internet.

Premiums. A premium is a tangible reward for a particular act, usually purchasing a product or visiting the point-of-purchase. Premiums are a type of incentive that works by adding value to the product. Examples of premiums are the toy in Cracker Jacks, glassware in a box of detergent, and a radio given for taking a real-estate tour. Premiums are either free or low in price.

The two general types of premiums are direct and mail. Direct premiums award the incentive immediately at the time of purchase. There are four variations of direct premiums: (1) store premiums, given to customers at the retail site; (2) in-pack premiums, inserted in the package at the factory; (3) on-pack premiums, placed on the outside of the package at the factory; and (4) container premiums, in which the package is the premium.

Mail premiums require the customer to take some action before receiving the premium. A self-liquidator premium usually requires that a payment be mailed in along with some proof of purchase before the customer receives the premium. The payment is sufficient to cover the cost of the premium. Another type of mail premium requires the customer to save coupons or special labels attached to the product that can be redeemed for merchandise.

Coupons. There are two general types of coupons that provide a discount on the price of a product: retailer and manufacturer coupons. Retailer-sponsored coupons can be redeemed only at the specified retail outlet. Manufacturer-sponsored coupons can be redeemed at any outlet distributing the product. They are distributed directly (direct mail, door-to-door), through media (newspaper and magazine ads, freestanding inserts), in or on the package itself, or through the retailer (co-op advertising). Manufacturers pay retailers a fee for handling their coupons. Coupons have also moved online.

Contests and sweepstakes. Contest and sweepstakes promotions create excitement by promising something for nothing and offering impressive prizes. Contests require participants to compete for a prize or prizes based on some sort of skill or ability. Sweepstakes require only that participants submit their names to be included in a drawing or other chance selection. Sweepstakes are now offered via mobile marketing. A game is a type of sweepstakes. It differs from a one-shot drawing type of sweepstakes because the timeframe is longer, so it establishes continuity requiring customers to return several times to acquire additional pieces (such as bingo-type games) or to improve their chances of winning.

Specialties: Specialty advertising presents the brands name on something that is given away in an attempt to remind consumers about the brand. Items include calendars, pens and pencils, T-shirts, mouse pads, tote bags, and water bottles. The ideal specialty is an item kept out in the open where other people can see it, such as a coffee mug.

Promotional Media The types of sales promotions just listed can be delivered in various media, including print, broadcast, and online. Direct mail has dominated the delivery of special promotions but much of that has moved online. The Internet is particularly useful for distributing coupons, inviting participation in games and sweepstakes, and even in sampling. In-store promotions using posters, shelf talkers, displays, and other types of signage are particularly effective at reaching people who are making a purchase decision.

Internet promotion is one of the hot areas of sales promotions. Many advertising campaigns include a campaign-dedicated website designed as a tie-in. Coupons can also be delivered via the Internet, and several sites have been designed for this, such as Catalinas ValuePage website (www.valupage.com).

Promotional Campaigns Special promotions are usually approached as a campaign because they involve a variety of media and reach many stakeholders. They also have a limited time frame. Promotional planners are continually looking for new ways to engage consumers. The Internet has opened up new opportunities, particularly with viral media, that drives a high level of social interaction that reinforces the involvement dimension of promotions. Big Ideas are critical to effective promotional campaigns.

How Are Consumer Promotions Used? Although an action response is the goal of most sales promotions, some programs are designed to build awareness first, but always with action as the ultimate goal. Promotions can deliver on a number of our Facets of Effects and drive a specific set of objectives. Awareness The first challenge is to create awareness of the brand, which is a real strength of advertising and the first step in consumer decision making. However, sometimes awareness can be increased when advertising is combined with an appropriate promotion to call attention to the brand name in order to get people to try the product.

Trial Creating awareness will only take the product so far, however. Consumers must also perceive the brand as offering some clear benefit compared to the competition. Sales promotion does this by arranging for experiences such as special events where people can try the product or see it demonstrated. Trial is one of the most important objectives of sales promotions, but it is essential to get the right people, the target audience, involved with the product.

Sales promotion has other tools that lead to trial such as sampling. Sampling is an effective strategy for introducing a new or modified product or for dislodging an entrenched market leader by enticing potential users to try the product. As a general rule of thumb, retailers and manufacturers maintain that sampling can boost sales volume as much as ten times when used with a product demonstration and 10 to 15 percent thereafter. Sampling is generally most effective when reinforced on the spot with product coupons. Consumers like sampling because they do not lose money if they dislike the product.

Another way sales promotion can motivate people to try a new product is to offer a price deal. These price deals are usually done through coupons, refunds, rebates, or premiums. Refunds and rebates are effective because they encourage consumers to purchase a product before a deadline. In addition, refunds stimulate sales without the high cost and waste associated with coupons.

Coupons mainly encourage trial, induce brand switching, and reward repeat business. The main advantage of the manufacturers coupon is that it allows the advertiser to lower prices without relying on cooperation from the retailer to distribute them. Advertising for these deals include sales, flyers, newspaper ads, and broadcast ads.

Maintain or Increase Market Share In addition to encouraging trial of a new product, another purpose of price deals is to convince prospective users to switch from an established competing brand. A price deal can also be used to reward loyal users in order to encourage their repeat business. Price deals are particularly effective in those situations where price is an important factor in brand choice or if consumers are not brand loyal.

To maintain a brands presence, increase its market share, or accomplish counter-competitive actions, marketers use promotional tools such as coupons, premiums, special events, and contests and sweepstakes. In addition to serving as a reward for buying a product, premiums, for example, can enhance an advertising campaign or a brands image.

Brand Reminder In addition to new product launches, promotions are also used at the reminder stage. This means that you change advertising copy to remind customers about the positive experience they had with the product and use sales promotions to reinforce loyalty with coupons, rebates, and other rewards. Specialty advertising serves as a reminder to the consumer to consider the product. Advertisers use specialty items to thank customers for patronage, to reinforce established products or services, and to generate sales leads.

Trade Promotions

Consumer awareness and desire mean nothing unless the product is available in places that the consumer expects to see it. Therefore, marketers know that they must engage the trade in programs if their consumer promotions are to be effective. In such programs, trade refers to all the people involved in the channel of distributionbuyers, brokers, distributors, wholesalers, dealers, franchisees, and retailers.

Principle: Consumer promotion is of little use if the product is not available where the consumer can find it.

Trade promotions are usually directed at distribution channel members, a practice that is sometimes referred to as channel marketing. It can also be used in any kind of situation where one business is promoting its services to another, which also includes personal sales and materials used in sales presentations. Typically, companies spend more than half of their total promotion budget on promotions directed at the trade.

Types of Trade Promotion Trade advertising directed at wholesalers and retailers provides trade members with information about new products and their selling points. In addition, trade promotion techniques, especially price discounts, point-of-purchase displays, and advertising allowances, motivate retailers to provide shelf space for products and consumer promotions. Here are the most common types of trade promotions:

Retailer (dealer) kits. Materials that support retailers selling efforts or that help representatives make sales calls on prospective retailing customers are often designed as sales kits. The kits contain supporting information, such as detailed product specifications, how-to display information, and ad slicksprint ads that are ready to be sent to the local print media as soon as the retailer or dealer adds identification, location, promotion price, or other information.

Trade incentives and deals. Similar to consumer price deals, a manufacturer may reward a reseller financially for purchase of a certain level of a product or support of a promotion. These promotional efforts can take the form of special displays, extra purchases, superior store locations, or greater local promotion. In return, retailers can receive special allowances, such as discounts, free goods, gifts, or cash from the manufacturer. The most common types of trade deals are buying allowances for increasing purchases and advertising allowances, which include deals on cooperative advertising and display allowances, that is, deals for agreeing to use promotional displays.

Contests. As in the case of consumer sales promotion, advertisers can develop contests and sweepstakes to motivate resellers. Contests are far more common than sweepstakes, mainly because resellers find it easy to tie contest prizes to the sale of the sponsors product. A sales quota is set, for example, and the retailer or person who exceeds the quota by the largest percentage wins the contest.

Point-of-purchase promotions. According to the Point-of-Purchase Advertising International Association (POPAI), the marketing-at-retail industry includes two forms: (1) manufacturer-designed displays distributed to retailers who use the displays to showcase products and create a personality for their stores, and (2) signs and displays used by retailers to cue their brand images and differentiate their stores from those of competitors. These are referred to as point-of-purchase (PoP) materials. Although PoP forms vary by industry, they can include special racks, display cartons, banners, signs, price cards, and mechanical product dispensers, among other tools.

Trade shows and exhibits. The trade show is a place where companies within the same industry gather to present and sell their merchandise, as well as to demonstrate their products. Exhibits are the spaces that are designed to showcase the product. This chapters Inside Story features a copywriter and content strategist and an iPad based game he designed as part of an interactive trade show booth exhibit.

How Is Trade Promotion Used? The ultimate gauge of a successful trade promotion is whether sales increase. Trade promotions are primarily designed to get the cooperation of people in the distribution channel and to encourage their promotion of the product to the consumer. Sales promotion brings resellers to that point of conviction. There are two primary roles for a trade promotion:

1. Trade support. To stimulate in-store merchandising or other trade support (for example, feature pricing, superior store location, or shelf space).

2. Excitement. To create a high level of excitement about the product among those responsible for its sale.

In addition, trade promotion is also used to accomplish other marketing objectives, such as manipulating levels of inventory held by wholesalers and retailers and expanding product distribution to new areas of the country or new classes of trade.

Demand: Push and Pull Strategies To understand the role of trade promotion, consider how sales promotion is used in push and pull strategies. Consumer and trade promotions interact through complementing push and pull strategies.

If consumers really want to try a product, based on what they have heard in advertising and publicity stories, they will ask their local retailers for it, which is called a pull strategy; that is, by asking for it they will pull the product through the distribution channel.

Principle: Consumer and trade promotions interact through complementing push and pull strategies.

A push strategy pushes the product through the channel by convincing (motivating or rewarding) members of the distribution network to carry a product. Here are the most common types of incentives and trade deals used with retailers as part of a push strategy.

Bonuses. A monetary bonus, also called push money or spiffs, is paid to a salesperson based on units that salesperson sells during a period of time.

Dealer loaders. Loaders are premiums (comparable to a consumer premium) that a manufacturer gives to a retailer for buying a certain amount of a product. A buying loader rewards retailers for buying the product. Display loaders reward retailers by giving them the display after the promotion ends.

Buying allowances. A manufacturer pays a reseller a set amount of money or a discount for purchasing a certain amount of the product during a specified time period.

Advertising allowances. The manufacturer pays the wholesaler or retailer a certain amount of money to advertise the manufacturers product. This allowance can be a flat dollar amount or it can be a percentage of gross purchases during a specified time period.

Co-Op advertising. In a contractual arrangement between the manufacturer and the resellers, the manufacturer agrees to pay a part or all of the advertising expenses incurred by the retailers.

Display allowance. A direct payment of cash or goods is given to the retailer if the retailer agrees to set up the point-of-sale display. Before issuing the payment, the manufacturer requires the retailers signature on a certificate of agreement.

Attention Some trade promotions are designed not only to get the attention of the trade members, but also to grab the attention of customers. PoP displays are designed to get the attention of shoppers when they are in the store and to stimulate impulse purchases. They are used by retailers, but provided by manufacturers.

The importance of PoP continues to increase, as we move to a self-service retail environment in which fewer and fewer customers expect help from sales clerks. POPAI has found that the PoP forms that have the greatest impact on sales are displays that tie in with entertainment, sports, or charities. In the Practical Tips feature located in this chapter, a marketing consultant explains how to best plan effective PoP promotions.

Motivation Most trade promotions are designed to, in some way, motivate trade members to cooperate with the manufacturers promotion. Incentives such as contests and trade deals are used. Trade incentive programs are used to stimulate frequency and quantity of purchase and encourage cooperation with a promotion.

Information Trade shows, which are an information-rich environment, display products and provide an opportunity to sample and demonstrate products, particularly for trade buyers, the people who buy for stores. Trade shows also permit companies to gather information about their competition.

multiplatform Promotions

This section focuses on sponsorships, event marketing, loyalty programs, and co-marketing or partnership promotions. Many of these promotional techniques, such as sponsorships and event marketing, cross over to other areas of marketing and blur the line between promotions, advertising, and public relations.

Sponsorships and Event Marketing Sponsorships occur when companies support an event, such as a sporting event, concert, or charity, either financially or by donating supplies and services. Event marketing means building a products marketing program around a sponsored event, such as the Olympics or a golf tournament.

Sponsorships and event marketing include sports, entertainment tours and attractions, festivals, fairs and other annual events, cause marketing, and support for the arts. Cause marketing sponsorship is a growth area with spending at around $1.6 billion in 2009.

Companies undertake sponsorships to build brand associations and to increase the perceived value of the brand in the consumers mind. The important thing is that the event must project the right image for the brand. Companies that use sponsorships focus their efforts on supporting causes and events that matter most to employees and customers. Although the most common sponsorships are around events, particularly sporting events, brands can also sponsor product related websites that are particularly effective at creating sales or recruiting people. The importance of sponsorships is growing worldwide.

Event Marketing The term event marketing describes the marketing practice of linking a brand to an event. Marketers use related promotional events, such as a tour or appearance of the product or its spokesperson at a mall or sporting event, to gain the attention and participation of people in the target audience who attend the event. The event showcases the brand, often with sampling, coupons, other incentives, and attention-getting stunts. To be successful, the event must match the brand to the target markets lifestyle. Events can also be used to build goodwill.

Business-to-business promotions also use events to reach trade audiences, which can include sales staff, distributors, retailers, and franchisees. These stakeholders are invited to participate in the event as a reward for their support.

The granddaddy of all events is the Super Bowl. The ads are the most expensive on television; prices can top $3 million for a 30-second commercial, which does not include production costs. These costs make sense because of the huge audience that is reached.

Its not just the commercials, however, that get the attention of marketers. Brands buy a Super Bowl spot to participate in all the frenzy that surrounds the event both before will pre-teaser ads, curing the game, and post-game coverage. The television spots create the opportunity for wide-ranging promotional activity that involve publicity, point of purchase displays, video clips, website and social media, search engine ads, and relationship programs with important partners, such as retailers and shareholders. The A Matter of Principle feature in this chapter makes the point that even in big-event advertising, it is still the big idea that counts.

Ambush marketing is the term given to promotional stunts used at events, such as the Olympics and the soccer and rugby World Cups, by companies that are not official sponsors. Ambush marketing typically occurs when one brand is trying to undermine the presence of a rival that is sponsoring an event. If the stunt can create enough confusion, it can reduce the return on the official sponsors investment, and at the same time, pick up additional visibility through publicity.

Other Promotional Support Advertisers have used blimps, balloons, inflatables, and even skywriting planes to capture attention and create an aura of excitement at events.

Loyalty Programs

Another type of program that crosses the line between advertising and promotion is frequency, or loyalty programs. A loyalty program, also called a continuity or frequency program (such as airline frequent flyer programs), is a promotion to increase customer retention. Typically the higher the purchase level, the greater the benefits.

Today, loyalty programs are synonymous with the word frequent. The frequent flyer club, first created by United Airlines in 1981, is the model for a modern continuity program. Continuity programs work in competitive markets in which the consumer has difficulty perceiving real differences between brands. The key to creating a successful loyalty program is offering memorable incentives that consumers want.

Marketers like membership programs because they also generate information for customer databases, which can be used to more specifically target customers with promotions and advertising materials.

Partnership Programs

Another promotion tool that crosses the lines is the partnership program. Co-marketing involves manufacturers developing marketing communication programs with their main retail accounts, instead of for them. If done right, these partnerships strengthen relationships between manufacturers and retailers. Co-marketing programs are usually based on the lifestyles and purchasing habits of consumers who live in the area of a particular retailer.

Co-branding When two companies come together to offer a product, the effort is called co-branding. Both companies are equally present in the products design and promotion, and both get to build on the other companys brand equity.

Licensing With licensing, legally protected brand identity items, such as logos, symbols, and brand characters, must be licensed, that is, a legal contract gives another company the right to use the brand identity element. In brand licensing, a company with an established brand rents that brand to other companies, allowing them to use its logo on their products and in their advertising and promotional events.

Tie-ins and Cross-Promotions Another type of cooperative marketing program is a tie-in or cross-promotion, which is an effective strategy for marketers using associations between complementary brands to make one plus one equal three. The intent is to spur sales. Ads are also designed to tie the two products together, and the sponsoring companies share the cost of the advertising.

The biggest cross promotions are arranged around movies and other entertainment events. Tie-ins succeed because brands can leverage similar strengths to achieve a bigger impact in the marketplace. Typically, marketers align themselves with partners that provide numerous complementary elements, including common target audiences, purchase cycle patterns, distribution channels, retailer penetration, and demographics to drive their products and promotions through retail channels and into the minds of consumers.

An interesting, although questionable, promotion was Bud Lights use of Fan Cans. It raised questions about rogue tie-in strategies that were not sanctioned by the schools. Others complained that it promoted drinking among students, many of whom were underage.

Sales Promotion and Integration Similar to direct response and other marcom tools, promotions are strategically designed to work within a mix of brand messages and experiences to build brand strength and presence. When all the marketing tasks are driven by a common strategy and shard objectives, the company communicates with the consumer in a single voice with a consistent creative approach.

An example of a multiplatform promotion that demonstrates how a variety of media and tools can work together was the Voyeur Project for HBO that won a Grand Prix at the Cannes Film Festival.