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Sales Promotion (Scope, Role and Growth (Reasons for Increase (Growing…
Sales Promotion
Scope, Role and Growth
Sales Promotion
A direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating an immediate sale
Consumer Oriented
Sampling, couponing, premiums, contests and sweepstakes, refunds and rebates, bonus packs, price-offs, frequency programs, and event marketing
Trade Oriented
Dealer contests and incentives, trade allowances, point-of-purchase displays, sales programs, trade shows, cooperative advertising, and other programs designed to motivate distributors and retailers to carry a product and make an extra effort to push it to their customers
Reasons for Increase
Growing Power of Retailers
Declining Brand Loyalty
Increased Promotional Sensitivity
Brand Proliferation
Fragmentation of Consumer Market
Short-term Focus
Increased accountability
Clutter
Competition
Growth of Digital Marketing
Concerns for Increase
Effect on Brand Equity
Rather compete on image or quality
Consumer Franchise Building Promotions
Sales promotion activities that communicate distinctive brand attributes and contribute to the development and reinforcement of brand identity
None Franchise Building
Accelerate the purchase decision process and generate an immediate increase in sales
Coordinating
Budget allocation
Coordination of ad and promotional themes
Media support and timing
Consumer Oriented
Objectives
Obtain Trial and Repurchase
Increase consumption of established brand
Defending Current Customers
Targeting specific marketing segment
Enhancing IMC and build brand equity
Techniques
Sampling
Variety of procedures whereby consumers are given some quantity of a product for no charge to induce trial
Couponing
Free standing inserts
Most popular method for delivering coupons to consumers, accounting for 90 percent of all coupons distributed. An FSI is a four-color multipage printed advertising booklet that contains consumer packaged goods cou- pon offers delivered with newspapers
Bounce back
Gives consumers inducement to repurchase the brand
cross ruff
Redeemable on the purchase of a different product, usually one made by the same company
Instant
Attached to the outside of the package so the consumer can rip it off and redeem it immediately at the time of purchase
In store
All co-op couponing programs distributed in a retail store environment
Premiums
An offer of an item of merchandise or service either free or at a low price that is an extra incentive for purchasers
Self liquidating
"require the con- sumer to pay some or all of the cost of the premium plus handling and mailing costs."
Contest
Promotion where consumers compete for prizes or money on the basis of skills or ability
Sweepstakes
Promotion where winners are determined purely by chance
Game
Has a chance element or odds of winning
Refunds and rebates
Offers by the manufacturer to return a portion of the product purchase price, usually after the consumer supplies some proof of purchase
Bonus packs
Offers by the manufacturer to return a portion of the product purchase price, usually after the consumer supplies some proof of purchase
Price off deal
Reduces price of the brand
Loyalty programs
One of the fastest growing areas
Event Marketing
Type of promotion where a company or brand is linked to an event or where a themed activity is developed for the purpose of creating experiences for consumers and promoting a product or service
Event sponsorship
Integrated marketing communications activity where a company develops actual sponsorship relations with a particular event and provides financial support in return for the right to display a brand name
Trade Oriented
Objectives
Obtain distribution for new products
Maintain trade support for established brands
Encourage retailers to display established brands
Build retail inventories
Types
Contests and Incentives
Push Money
Cash payments made directly to the retailer’s or wholesaler’s sales staff to encourage them to promote and sell a manufacturer’s product
Trade allowances
Buying allowances
Deal or discount offered to resellers in the form of a price reduction on merchandise ordered during a fixed period
Discount or deal offered to retailers or wholesalers to encourage them to stock, promote, or display the manufacturer’s products
Off-Invoice
Certain per-case amount or percentage is deducted from the invoice
Promotional allowances
Manufacturers often give retailers allowances or discounts for performing certain promotional or merchandising activities in support of their brands
Slotting allowances
Fees retailers charge for providing a slot or position to accommodate the new product."
Failure fee's
New product does not hit a minimum sales level within a certain time
Displays and point of purchase materials
Planograms
Configurations of products that occupy a shelf section in a store
Sales training programs
Trade shows
Forum where manufacturers can display their products to current as well as prospective buyers
Cooperative advertising
Cost of advertising is shared by more than one party
Horizontal cooperative advertising
Advertising sponsored in common by a group of retailers or other organizations providing products or services to the market
Ingredient sponsored
Help establish end products that include the company’s materials and/or ingredients
Vertical
Manufacturer pays for a portion of the advertising a retailer runs to promote the manufacturer’s product and its availability in the retailer’s place of business
Abuse
Sales promotion trap
When several competitors use promotions extensively