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Chapter 17 Sales Promotion, Point-of-Purchase Advertising, and Support Media 1 © 2009 South-Western, a part of Cengage Learning PPT 17-1 Part Five: Integrated Brand Promotion We have considered the Process, Planning, Preparation, and Placement of advertising and IBP in the first Four Parts of the book Now we take a detailed look at the full range of IBP tools available to the advertiser Each of these IBP tools has a unique capability to influence audience perception of a brand 2 PPT 17-2 Sales Promotion--Defined “Using incentives to create a perception of greater brand value” Consumer Market sales promotion – Induce household consumers to purchase a firm’s brand Trade-Market sales promotion – Motivate distributors, wholesalers, and retailers to stock and feature a brand Business Market sales promotion – Cultivate buyers in large corporations who make purchase decisions 3 PPT 17- 3 Sales Promotion Examples Coupons Brand placements Contests Gift Cards Allowances Sweepstakes Incentives Sampling Price-off deals Premiums Loyalty Programs Trade Shows Point of Purchase Displays 4 PPT 17- 4 Sales Promotion vs. Advertising Short term demand vs. long term demand Encourages brand switching vs. brand loyalty Induces trial use vs. encourage repeat purchase Promotes price vs. image Immediate results vs. long term effects Measurable results vs. difficult to measure 5 PPT 17- 5 Importance of Sales Promotion $300 billion in 2008 Growth rate: 4-8 percent Reasons for growth: – – – – – – Demand for accountability Short-term orientation Consumer response to promotions Proliferation of brands Increased power of retailers Media clutter 6 PPT 17- 6 Objectives for ConsumerMarket Sales Promotion 1. Stimulate trial purchase 2. Stimulate repeat purchases 3. Stimulate larger purchases 4. Introduce a new brand 5. Combat or disrupt competitors 6. Contribute to IBP 7 PPT 17- 7 Consumer-Market Sales Promotion Techniques 1. Coupons 2. Price-off deals 3. Premiums 4. Contests/sweeps 5. Samples & trials 6. Phone gift cards 7. Brand placements 8. Rebates 9. Frequency programs 10.Event sponsorship 8 PPT 17- 8 Coupons Entitles a buyer to a price reduction for a product or service Advantages – Give a discount to price sensitive consumer while selling product at full price to others – Induce brand switching – Timing and distribution can be controlled – Stimulates repeat purchases – Gets regular users to trade up within a brand array 9 PPT 17- 9 Ad in Context Example Coupons are the most widely used form of consumer sales promotion. PPT 17-10 10 Coupons Disadvantages – Time of redemption cannot be controlled – No way to prevent current customers from redeeming coupons – Coupon programs require costly administration – Fraud is a serious, chronic problem 11 PPT 17- 11 Price-Off Deals Offers consumer reduced price at point of purchase through specially marked packages Advantages – Controllable by manufacturer – Can effect positive price comparisons – Consumers believe it increases value of a known brand Disadvantage – Retailers believe it creates inventory and pricing problems 12 PPT 17- 12 Premiums and Advertising Specialties Premiums: free or at a reduced price with another purchase Free premiums provide item at no cost Self-liquidating premiums require consumers to pay most of the cost of the item Advertising specialties: – A message placed on a free, useful item 13 PPT 17- 13 Ad in Context Example Premiums attract attention to a brand and offer the consumer something for free. PPT 17- 14 14 Contests and Sweepstakes Contests: consumers compete for prizes based on skill or ability. Sweepstakes: winners picked by chance Both create excitement and interest But . . . – Legal and regulatory requirements are complex – Consumers may focus on the game rather than the brand – Difficult to get an IBP message across in a game 15 PPT 17- 15 Samples and Trial Offers Sampling: Giving consumer an opportunity to use a brand on a trial basis with little or no risk Types of sampling – In-store (Costco) – Door-to-door – Mail – Newspaper – On-package – Mobile (on-site) Trial offers – Used for more expensive items – Consumer tries product for a fixed time 16 PPT 17- 16 Phone and Gift Cards Manufacturers offer either for free or for purchase debit cards – with phone time – or preset spending limits Examples include offers from Starbucks, Barnes & Noble, and The Gap 17 PPT 17- 17 Rebates Money back offer requiring the buyer to mail a request for money back from the manufacturer Often tied to multiple purchases Many consumers fail to bother sending in the rebate request form 18 PPT 17- 18 Frequency Programs Also known as continuity programs Offers customers discounts or free products for repeat patronage Common in airline, hotel, and restaurant businesses 19 PPT 17- 19 Objectives for Promotions in the Trade Market Objectives: Uses a “push” strategy: Push the product into the distribution channel to the consumer: – Obtain initial distribution – Increase order size – Encourage cooperation with consumer market sales promotions – Increase store traffic 20 PPT 17- 20 Trade-Market Sales Promotion Techniques Incentives: Push money Allowances: Merchandise allowances, slotting fees, billback allowances, off-invoice allowances Sales Training Programs Cooperative (Co-Op) Advertising 21 PPT 17- 21 Business Market Sales Promotion Techniques Trade Shows Business gifts Premiums and advertising specialties Trial offers Frequency programs 22 PPT 17- 22 Ad in Context Example Trial offers are very effective in the business market. Why? PPT 17- 23 23 Risks of Sales Promotion Create a price orientation Borrow from future sales Alienate loyal customers Time and expense Legal considerations 24 PPT 17- 24 Point of Purchase (P-O-P) Advertising Definition – Materials used in the retail setting to attract shoppers’ attention to a brand, to convey primary product benefits, or highlight pricing information. – Displays may feature “price-off” deals as well. Objectives for Point-of-Purchase Advertising – – – – Draw consumers’ attention to a brand in the retail setting. Maintain purchase loyalty among brand loyal users. Stimulate increased or varied usage of the brand. Stimulate trial use by users of competitive brands. 25 PPT 17- 25 P-O-P Advertising and the Trade and Business Markets Product displays and information sheets encourage retailers to support one distributor or manufacturer’s brand over another. P-O-P promotions can help win precious shelf space and exposure in a retail setting. A P-O-P display should be designed to draw attention to a brand, increase turnover, and possibly distribute coupons or sweepstakes entry forms. To combat losing business to online shopping, retailers are trying to enliven the retail environment, and point-of-purchase displays are one strategy. 26 PPT 17- 26 Support Media Purpose: To reinforce or extend a message being delivered through other media – Signs, billboards, posters – Transit – Aerial – Specialty – Directory 27 PPT 17-27 Outdoor Signage and Billboards Advantages Disadvantages – Wide local exposure – Captivating – Around-the-clock exposure – Address an immediate need or desire – Message limits – Location affects impact – Relatively expensive – Criticized by environmental groups 28 PPT 17-28 Transit Ads Transit Ads – – – – Urban environments Demographic segmentation Timely to purchase Build brand awareness 29 PPT 17-29 Ad in Context Example Transit ads can reach a target audience in well defined geographic areas. PPT 17-30 30 Aerial Ads Aerial Ads – Blimps increasingly common – Common at sporting events – Skies are getting crowded! – Networks are in control 31 PPT 17-31 Directory Advertising Advantages – High acceptance – High availability – Final link to purchase Disadvantages – Too many directories – Long lead times – Limited creativity New: CD-ROM and Webbased directories 32 PPT 17-32 Ad in Context Example Web based directories offer convenience and speed. PPT 17-33 33 Packaging Promotional Benefits of Packaging to the Advertiser: – The package carries the brand name and logo – The package can communicate “value” – The package can communicate “image” and “quality” 34 PPT 17-34 Ad in Context Example Packaging highlights the brand name, quality and image. 35 PPT 17-35 When Support Media are More than Support Media Guerrilla Marketing—”Stunt” promotions Viral campaigns—Using influencers (Chapter 20) Special Events—Creating visibility and “affinity” for a brand among a highly select target group 36 PPT 17-36