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Learning Objectives Consumer Promotions S S P • 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 S S P Key Questions S S P 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 S S P Target Audience • New or existing customers • Motivation - hedonic or utilitarian • DBM - emotional, rational, patronage, product • Group influences • Geodemographic targeting S S P Promotion Budget S S P • 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 S S P • Analyze benefits and risks • Consider testing before rollout • Consistent with budget • Goal: generate attractive benefit for greatest number of consumers S S P 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 S S P 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 S S P