Download Learning Objectives

Learning Objectives
1 Explain the importance and growth of different types of sales promotion.
Sales promotions use diverse incentives to motivate action on the part of consumers,
members of the trade channel, and business buyers. They serve different purposes
than does mass media advertising, and for some companies, receive substantially more
funding. The growing reliance on these promotions can be attributed to the heavy
pressures placed on marketing managers to account for their spending and meet sales
objectives in short time frames. Deal-prone shoppers, brand proliferation, the increasing
power of large retailers, and media clutter have also contributed to the rising popularity
of sales promotion.
2 Describe the main sales promotion techniques used in the consumer market.
Sales promotions directed at consumers can serve various goals. For example, they
can be employed as means to stimulate trial, repeat, or large-quantity purchases. They
are especially important tools for introducing new brands or for reacting to a
competitor's advances. Coupons, price-off deals, phone and gift cards, and premiums
provide obvious incentives for purchase. Contests, sweepstakes, and brand placements
can be excellent devices for stimulating brand interest. A variety of sampling techniques
are available to get a product into the hands of the target audience. Rebates and
frequency programs provide rewards for repeat purchase.
3 Describe the main sales promotion techniques used in the trade and business
markets.
Sales promotions directed at the trade can also serve multiple objectives. They are a
necessity in obtaining initial distribution of a new brand. For established brands, they
can be a means to increase distributors' order quantities or obtain retailers' cooperation
in implementing a consumer-directed promotion. P-O-P displays can be an excellent
tool for gaining preferred display space in a retail setting. Incentives and allowances can
be offered to distributors to motivate support for a brand. Sales training programs and
cooperative advertising programs are additional devices for effecting retailer support.
In the business market, professional buyers are attracted by various sales
promotion techniques. Frequency (continuity) programs are very valuable in the travel
industry and have spread to business product advertisers. Trade shows are an efficient
way to reach a large number of highly targeted business buyers. Gifts to business
buyers are a unique form of sales promotion for this market. Finally, premiums,
advertising specialties, and trial offers have proven successful in the business market.
4 Identify the risks to the brand of using sales promotion.
There are important risks associated with heavy reliance on sales promotion. Offering
constant deals for a brand is a good way to erode brand equity, and it may simply be
borrowing sales from a future time period. Constant deals can also create a customer
mindset that leads consumers to abandon a brand as soon as a deal is retracted. Sales
promotions are expensive to administer and fraught with legal complications. Sales
promotions yield their most positive results when carefully integrated with the overall
advertising plan.
5 Explain the coordination issues for integrated brand promotion associated with
using sales promotion.
One of the coordination problems is message coordination. Advertising messages
designed to build long-term loyalty may not seem to consumers to be totally consistent
with the extra-value message of the sales promotion. This is the classic problem that
marketers face in coordinating sales promotion with an advertising campaign. First,
advertising messages promote brand features or emotional attractions. Then, the next
contact a consumer may have with the brand is an insert in the Sunday paper that touts
a price reduction or contest.
Another key in coordination involves media coordination. The success of a sales
promotion depends on the consumer believing that the chance to save money or
receive extra quantity of a product represents enhanced value. If the consumer is not
aware of a brand and its features and benefits, and does not perceive the brand as a
worthy item, then there will be no basis for perceiving value—discounted or not. This
means that appropriate advertising should precede price-oriented sales promotions for
them to be effective.