Download Consumer Promotions

Learning Objectives
Consumer Promotions
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• Define consumer promotions
• List and discuss key questions for planning and
Kurt Komaromi
implementing promotions
• Review major types of consumer promotions
Sales +
Sales
Promotion
Consumer Promotion
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Key Questions
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1. What’s the goal of your promotion?
•
Set of actions to stimulate sales by influencing the
end consumer
•
Short-term strategies designed to motivate
customers to buy
2. Who is your primary target audience?
3. What is your promotion budget?
4. What type of promotion will work best?
5. How will you evaluate your promotion?
Source: SCORE
Promotion Goals
• Boost short-term sales
• Introduce new product
• Reposition product
• Bundle existing products
• Capitalize on holidays
• Revive dormant products
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Target Audience
• New or existing customers
• Motivation - hedonic or utilitarian
• DBM - emotional, rational, patronage, product
• Group influences
• Geodemographic targeting
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Promotion Budget
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• Build into marketing budget
• Allocate to various media
• Plan for maximum impact
• Justify with $$$ benefits
• Costs must not exceed benefits
Evaluate Promotion
• Compare outcomes to goals
• Cost/benefit analysis
• Isolation effect
• Evaluate program components
• Strategy evaluation
• Lessons for future
Coupon
A certificate that entitles
consumers to an immediate
price reduction.
• On-shelf coupons
• Checkout dispensers
• On-line distribution
• Mobile coupons
• Redemption rate = 1.5%
• Trend is to targeted audience
Type of Promotion
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• Analyze benefits and risks
• Consider testing before rollout
• Consistent with budget
• Goal: generate attractive benefit for
greatest number of consumers
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Consumer Promotions
Coupons and Rebates
Premiums
Loyalty Marketing Programs
Contests & Sweepstakes
Sampling
Point-of-Purchase Promotion
Social Coupons
• National and local coupon sites
• Consumers sign up to receive promotions
• Coupons distributed via e-mail, mobile
• Consumers buy promoted product/service deal
• Minimum number of purchases usually required
• Incentives for spreading offer to friends
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Rebate
A cash refund given for the
purchase of a product during
a specific period.
• Price cut offered direct to consumer
• Lowers price while protecting MSRP
• Often combined with bundling
• Info used to build customer database
• Many rebates not redeemed
Frequent
Buyer
Program
A loyalty program in which loyal
consumers are rewarded for
making multiple purchases.
• Build long-term relationship with customers
• Encourage repeat sales and volume purchases
• Inoculate customers from competition
• Combined with one-to-one marketing
• Often co-branded with partners
Promotions that depend on
Sweepstakes
chance or luck, with
free participation.
• Cannot be considered a lottery - purchase
usually not required
• Generates lots of publicity
• No direct connection to sales
• Only a few consumers benefit
Premium
An extra item offered to the
consumer, usually in exchange
for some proof of purchase.
• Free items offered with purchase
• Extra product for regular price
• BOGO - buy one get one free
• Enhances value proposition
• Behold the power of “free”
Contest
Promotions that require
skill or ability to compete
for prizes.
• Functional - customers use product to design
something
• Marketing - customers design an ad
• Generates publicity and engages customers
• May not generate new customers
Sampling
A promotional program that
allows the consumer the
opportunity to try a product or
service for free.
• Reduces risk of trying new product
• Increasing in importance for marketers
• Sample distribution
• Direct mail
• Retail store displays
• Packaged with other products
• Special events
P-O-P
Point-of-purchase:
Promotional display in retail
location
• Placed in high-traffic locations
• Often combines advertising and promotion
• Many types - signage, bins, islands, platforms
• Trends - digital, interactive, sustainable
• Called the “silent salesman”
• Stimulates impulse buying
• Very effective in boosting sales
What’s New?
• RFID tracking of products
• Learning Labs - retail stores using video
surveillance to monitor shopper behavior:
• Aisle traffic
• Dwell time
• Interaction with displays
• Mobile technology
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