Please enable JavaScript.
Coggle requires JavaScript to display documents.
MKTING 11 (Sales promotion (all promo activities (exclude adv, PR, DM,…
MKTING 11
Sales promotion
- all promo activities (exclude adv, PR, DM, online marketing, personal selling) that stimulate ST behavioural reponses from people
- incentives in addition to product's basic benefits
-
SP techniques examples
Consumer
- samples
- coupons
- POP material
- sweepstakes
- premiums
Trade (wholesalers, retailers)
- merch allowance
- buying allowance
- adv allowance
- display allowance
- trade shows
Sales force (company)
- meetings
- contest
- bonus
- POP displays
Brand level promo target
- encourage sales force
- push retailers
- pull consumers
Push [manufacturer - resellers - cust]
Pull [ consumers - resellers - manu - cust]
Promo growth
- shift in manu vs retailer bal of power
- increase brand parity & price sensi
- reduce brand loyalty
- reduce media effectiveness & splintered mass mkt
- emphasis on ST result in corporate reward structure
- increase in responsiveness to promo (deal prone)
Promo expenses is reductions in sales revenue instead of current expenses (motivate managers to allocate more $ to adv)
Can do
- short term incentive
- usually stimulate trial/repeat purchase
- stimulate sales force enthu
- revive mature brand sales
- intro new products to the trade
- increase product usage & preempt competition by loading cust
Loading - eg. 1 toothpaste $5, guardian promo 3 for $5 so i bought 10, watsons has promo 3 for $4, i bought it again. have no space to try new products, colgate is loading me
Can't do
- compensate for poorly trained sales force/lack of adv
- give trade/cust any compelling LT reason to continue buying brand
- permanently stop established brand declining sales trend/change non-acceptance of undesired product
Excessive emphasis on sales promo can
- damage image
- diminish brand loyalty
- reduce consumption
Decisions in all programs
- incentive size
- conditions to participate
- distribution vehicle
- promo duration
- promo timing
- promo total sales budget
Trade promotion
DIST / Shelf space - displays - inventory - turnover
Display - where to place? eye level?
Inventory - want people to carry invt for my product
Shelf space - how many facing
More money spent on trade promo > sales promoFrequency, recency, amount, dataScope
- intro new/revised products
- increase distribution of new packages/sizes
- build retail inventories
- reduce excess inventories & increase turnover
- counter competitive activity
- maintain/increase manu share of shelf space
- obtain display outside normal shelf locations
Successful TP
- financial incentive
- correct timing
- minimse retailers effort/cost
- quick results
- improve retailer perf
Examples
- Trade allowances (off-invoice, bill-back, slotting & exit fees)
- Cooperative adv & vendor support programs
- Trade contest & incentives
- POP materials
- Trainings
- Specialty adv
- Trade shows
Trade allowances
- most used
- free goods/price reduce for certain qty purchased
- retailers dont necessarily pass along the discounts to cust
- retailers receive allowance for featuring manu brand in ad/provide special displays, bill back manu for these services
- pay for access to slot/location in retailers warehouse
- paid cash to get their brand accepted by retailers
Forward buying
- buy larger qty than needed bcs of deals
Problems
- deal savings not told to cust
- retailers cost increase (stock pile, hold invt)
- manu have higher prod cost (extra shift, OT pay, adopt bill and hold program)
- diverting
bill & hold - bill for deal & hold invt/produce when needed
Diverting - manu restricts deal to limited geographical areas instead of internationally so retailers buy large qty then sell off in other higher priced areas
International level - products meant for foreign mkt diverted back to domestic mkt
eg. buy levis sell into asian mkt altho its not for them
Exit fees
- must meet avg weekly vol amt to stay in store
- if dont meet, they will issue deslotting charge thats to cover handling costs of removing products
Slotting allowance - what u pay retailer to slot products on shelf
Cooperative advertising
- manu pays for all/some of the ad costs undertaken by retailer, manu initiate
- compare this to vendor supoprt system (same but initiated by large retailers eg. walmart)
Trade contest - based on managers meeting sales goal
Trade incentives - given to retail managers & salesppl for performing certain tasks
Push money - provide incentive to salesppl to aggressively sell to cust a certain item
Specialty ad - promo medium that uses useful/decorative articles to tell TA org identity & promo msg
Brand management objectives (influence)
- generate purchase trial, retrial (new cust)
- encourage repeat purchase
- reinforce brand image
Consumer rewards (Encourage behaviour)
- can be immediate/delayed reward &
Utilitarian
- monetary savings
- reduced search & decision costs
- improve product quality
Hedonic
- sense of wise shopper
- achieve need for stimulation, variety
- entertainment value
- viewed as tech savy
- socialise w others on a deal
Role of promo agencies
Specialized promo agencies - work w brand managers to formulate promo strategies & implement tactical programs
Rise of online promo agency - coupons, sweepstakes, online promo game, free sample offerings
Sampling
- premier sales promo device give them actual/trial sized product, generating trial usage
Methods
- direct mail
- instore sample
- online sample
- newspapers, magazines
eg. direct mail - mailed to households targeted by demo/character/geodemo
When?
- used to induce trial
- new/improved brand is superior/has distinct relative advantages
- innovative concept difficult to communicate by only adv
- budget can afford to generate cust trial quickly
Problems
- expensive
- distribution mishandling
- distribute to wrong mkt
- misued by cust
- pilferage (Steal)
- in/or package samples dont catch current non cust
Coupon
- promo device that reward cust for purchasing by providing cents/dollars off savings
Methods
- freestanding inserts (most common)
- instores (shelf, instant, handout)
- DM
- newspapers, magazines
POP couponing
Instant redeemable coupons
- peel from package at POP
- high redeem rate
- alt to price off deals
Shelf delivered
- instant coupon machines
- machines attached to shelf w coupon brand
Scanner delivered
- delayed but effective bcs they provide a way to carefully target coupon distribution
Mail
- increase amt of product purchases
- expensive
- ex & inefficient for brands enjoy high market share
FSI + other media delivered
- broad exposure
- cheaper
- reminder, advertising function
- misredemption
- decline readership
In/On pack
- delayed, encourage repeat purchases
- coupon for one brand promoted by another brand (cross ruff)
- advantage ; virtually no distribution costs
- limitations ; dont reach nonusers, dont leverage trade interests
Online
- cust print own coupons, advertiser no cost
- fraud
- distributed wirelessly
Premiums - merch/service offered as gift by manu to induce action from ppl eg. happy mealSemi liquidating - pay me smthg for premium but amount dont cover cost of itSelf liquidating - pay me smthg but amount covers cost of premiumPrice-off - reduce price clearly labeled on package
Bonus packs - extra qty same priceEffective when brand obj is
- reward present brand users
- get cust buy large qty
- repeat purchase pattern
- off shelf display space
- provide sales force incentive to get retailer support
Games
- used in contests, sweepstakes (build customer database)
- instant reward
- encourage repeat purchase
Refund - cash reimburssement for purchasing consumer packaged goods (CPG)Rebate - cash reimbursement for purchasing durable goodC&S
- enhance brand image
- sweepstakes preferred bcs inexpensive and simple (based on chance, no need proof of purchase)
- contests ; skill to solve problem, may need proof
Overlay promo - combine 2/more promo techniques (increase likelihood cust will attend a promo msg eg. premium offer and coupon in a FSI)Tie-in promo
- same time promo of multiple brands in a promo
- intra company is within
- inter company is between
- cost effective but lead time long
- partners image shd reinforce each other
Problems
- long lead time
- might have conflict as each partner try to gain attn
To reduce probs,
- each partner cust profile must be similar
- partners image must reinforce
- cooperative
Continuity promo
- reward repeat purchase
- loyalty, point programs (increase retention, can use freq mkting too)
Retailer promo
- increase store traffic, offer discount, build loyalty
- coupons, special price, samples (increase freq qty of purchase)
Evaluate SP ideas
- identify obj
- achieve agreement
- evaluate
Postmortem
- expense
- efficiency (cost per unity moved)
- execution ease
- equity enhancement
- effectiveness (total units sold)