Download Chapter 14 Global Marketing Decisions: Sales Promotion, Personal

Chapter 14
Global Marketing Decisions:
Sales Promotion, Personal
Selling, Special Forms of
Marketing Communication
© 2005 Prentice Hall
14-1
Sales Promotion
Sales promotion refers to any paid
consumer or trade communication program
of limited duration usually aimed at
stimulating sales / trials
– Price (rebates, discounts, coupons) vs. nonprice promotions (sampling, premiums,
sweepstakes, contests, etc.)
– Consumer vs. trade promotions (increase
availability in channel)
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Sales Promotion
Provide a tangible incentive to buyers
(lower prices, etc.)
Reduce the perceived risk associated with
purchasing a product (sampling)
Provide accountability for communications
activity (results can be tracked)
Provide method of collecting additional data
for database (forms to be filled in)
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Sales Promotion: Global or Local
In countries with low levels of economic
development, low incomes limit the range of
promotional tools available
– Free samples, demonstrations
Market maturity can also be different from
country to country
– Coupons and sampling in growing markets
– Trade allowances and loyalty programs in mature
markets
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Sales Promotion: Global or Local
Local perceptions of a particular promotional tool
or program can vary
– Coupon usage not popular in India
Local regulations may rule out use of a particular
promotion in certain countries
Trade structure in the retailing industry can affect
the use of sales promotions
– Consolidated retail structures require more trade
promotions (USA, Europe)
– Fragmented retail structures (India) require less trade
promotions
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Sampling
Sampling
– Provides consumer with opportunity to try
product at no cost
– May be distributed in stores, in the mail,
through print media, at events, or door-to-door
– Point-of-use sampling (Starbucks’ chill patrols;
Mylanta introduction in India)
– Point-of-dirt sampling (Unilever’s Lever 2000
hand wipes in food courts and petting zoos)
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Couponing
Couponing
– Printed certificates entitle the bearer to a price
reduction or some other special consideration
for purchasing a particular product
Couponing accounts for 70% of consumer
promotion spending in the US
Free standing inserts, on-pack coupons, inpack coupons, cross coupons)
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Couponing
Stimulate trial by non-users
Operant conditioning of users (Kroger’s 20
cents a gallon price off on gas)
Not widely used in Asia since using a
coupon is considered a sign of cheapness
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Couponing
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Sales Promotion: Issues and
Problems
Consumer fraud
– Pepsi promotion with Apple
Regulations vary by country
– Europe regulates promotions heavily
Cultural dispositions to coupons and other sales
promotions
– Malaysia, India see coupon usage as embarrassing
– Islam frowns on gambling so sweepstakes may not
work
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Personal Selling
Person-to-person communication between a
company representative and potential
buyers
Focus is to inform and persuade prospect
Short-term goal: make a sale
Long-term goal: build relationship
Buyer and seller may come from different
cultural backgrounds
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Personal Selling
Useful when countries regulate media
heavily
Japan – comparative advertising is difficult
hence product comparisons can be made on
a face to face basis
Low wage countries – cheaper to build a
sales force
Issue: host country nationals or expats?
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Sales Force Nationality
Expatriates
Host country
Third country
Other options
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Expatriates
Advantages
Disadvantages
– Superior product
knowledge
– Demonstrated
commitment to service
standards
– Train for promotion
– Greater HQ control
– Higher cost
– Higher turnover
– Cost for language and
cross-cultural training
Return
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Host Country
Advantages
Disadvantages
– Economical
– Superior market
knowledge
– Language skills
– Superior cultural
knowledge
– Implementation
quicker
– Needs product training
– May be held in low
esteem
– Language skills may
not be important
– Difficult to ensure
loyalty
Return
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Third Country
Advantages
–
–
–
–
Disadvantages
Cultural sensitivity
Language skills
Economical
Allows regional sales
coverage
– May face identity
problems
– May be blocked for
promotions
– Needs product and/or
company training
– Loyalty not assured
Return
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Special Forms of Marketing
Communications
Direct Marketing
– Direct mail
– Catalogs
– Infomercials, Teleshopping
Event Sponsorship
– Concerts, sporting events
– Product placement in movies
Internet Communications
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Direct Marketing
Any communication with a consumer or
business recipient that is designed to
generate a response in the form of:
– An order
– Request for further information
– A visit to a store or other place of business
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Direct Marketing vs. Mass
Marketing
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One-to-One Marketing
Building from Customer Relationship
Management
– Identify customers and accumulate detailed information
about them
– Differentiate customers and rank them in terms of their
value to the company
– Interact with customers and develop more cost efficient
and effective forms of interaction
– Customize the product/service offered to the customer
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Catalogs
A magazine style
publication that
features photographs
and extensive
information about a
company’s products
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Product Placements
Movies, TV programs, books, etc.
Low attributions hence low skepticism
Circumvent zipping and zapping
Realistic slice-of-life placement
Ethically-charged products
Fit of the brand with the placement segment and its effect
on recall and attitudes
Risk of the product being shown in an unfavorable light
Joint promotions between the movie and the product
Too many placements in a program
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