Download Sales Promotion

Sales Promotion
What is the difference between
Promotion, Advertising, Publicity,
Personal Selling, Direct Marketing?
Advertising
• paid communication from a company
to the public. It communicates
messages about a product, service or
company that appears in mass media
such as television, radio and
magazines.
Personal Selling
• direct communication between a
company and consumers. It is usually
done in person but sometimes over
the phone.
Direct Marketing
• direct communication between a
company and an individual customer
other than face-to-face personal
selling.
Sales Promotion
• short term incentive aimed at
increasing the purchase of a product
or service. Where advertising says
“buy our product”, sales promotion
says “Buy it now!”
Publicity
• publicity is non-paid for positive or
negative media coverage.
Public Relations
• is an organized effort to present a
positive image of the company or its
products in non-advertising
communications. Readers will believe
a 3rd party more easily.
Types of Sales
Promotions:
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Coupons
Premiums
Contests
Sweepstakes
Sampling
Bonus pack
Rebate
Point of purchase (POP)
Contests and Sweepstakes
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Award a prize to a select number of entrants.
Contests are more skill-based while sweepstakes are
more luck-based.
Canadian law prohibits exchanging money for a chance to
win a luck-based game (This is primarily called gambling
and is controlled by the provincial governments.)
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Companies get around this using a “skill” testing question.
They also offer a “no purchase necessary” option for nonbuyers. (There are usually barriers to this type of entrance
though – mail in, fax in, fill out more forms, etc.)
By having the contest winner produce some sort of skill or
knowledge, they can claim that the sweepstake is actually a
contest.
Contest/Sweepstakes
continued…
• Two fold purpose of contests:
– (1) Promote new or existing products;
– (2) Gain customer information for company database.
• Key idea: People like to receive something for
nothing.
• Used for both products and services – e.g., Visa is
running a contest where you can get your monthly
bill paid off by Visa. All you have to do is use your
Visa card.
Contests don’t always work:
Northwest Airlines offered the use of one of
its jet for a round trip to Florida and 3 night’s
accommodations for the winner of their
contest and 92 of his/her friends.
Unfortunately, winnings are taxable in the U.S.
and the winner did not want to pay the taxes on
the winnings. Northwest offered $15,000 to
offset the loss; however, these winnings were
taxable too. The winner forfeited the trip and
decided to settle for a smaller cash prize.
Refunds and Rebates
(Trial Offers)
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Refund: return of the full amount of
money tendered by the customer.
Rebate: returns a portion of the money
tendered by the customer.
How are they used:
Refunds – for trial offers;
Rebates – to promote the sale of other
company products, or the sale of the
purchase product.
• Examples:
– Rebates on Computer Hardware (Printers),
– website that gives you the best purchase price for
items, services.
– cash back if not satisfied.
• Goal of:
– Trial offers: let you try the product first hand – most
people won’t go through the trouble of sending it back
unless they are really unsatisfied.
– Rebates: future sales – rebates on next item purchased.
– Both allow companies to generate mailing lists.
Coupons
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Document that grants the person a reduction in
the price of a specific product or service (has a
face value, but not a cash value)
From where do you obtain coupons:
Newspapers (or any print)
On-line
Flyers (Mail)
At a store’s cash register/entrance
Displays in stores
Cash register receipts
Purchased coupon booklets
Coupons continued…
• Redemption rate – number of coupons
issued compared with the number of
coupons used.
• What would affect the redemption rate?
– Face value
– Ease of use
– Availability/knowledge of coupon
So many coupons – how to
make yours stand out?
– Put coupons right on product (buy and save immediately,
future sales).
– Place where customers can find all the coupons
redeemable in the store.
– Computerized cash registers that can check the bar
codes of the purchases and print out coupons that apply
to purchases (or similar purchases – e.g., a person buying
a razor may get a coupon print out for shaving cream.)
• Example: Boston Pizza gave out fortune cookies to
its customers when promoting their expansion into
Taiwan. One in every ten cookies had a coupon for
a free pizza or soft drink
Samples
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Offering in whole or part a product or service to the
customer free of charge.
Good for promotion of new products or improved
products.
Better at point of purchase than in mail or delivery.
Works well with other forms of promotion – e.g., sample a
food at a grocery store and have coupons at the sample
table so that customers get a deal on the purchase.
Examples:
Pepsi Taste Test (Market Research in form of survey – but
also a sample).
Costco (get an entire meal by walking around sampling
products), Shoe cleaner, eye glasses cleaner (just soap),
window cleaning (will clean one window.)
Premiums and Self
Liquidators
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Promotions that allow people to acquire
something by purchasing something else.
Premiums: free product or service
offered after purchase.
Self-Liquidator: a product or service
offered after purchase at a substantially
reduced price.
Premiums and Self
Liquidators Examples
• Liquor Store – get a small bottle of Jack Daniel’s
when you purchase a big bottle of Bailey’s Irish
Cream.
• Air Miles Cards, buy a coke and keep the mug,
Coffee cards, store credit cards, skate
sharpening (buy five get the sixth one free)
• Good for advertising as many premium (giveaway
items) are hats, shirts, bags, etc. with the
company logo on it
Bonus Packs
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When a product offers an increased
quantity of the product
Toothpaste – get 25% more
Soap – buy five bars get the sixth one
free
Services? (Rent our car for two days and
the third day is free – don’t have to come
back or make another purchase to use
the day – like in a premium)