Unit 13.Sales Promotion
Unit 13. Sales Promotion
SalesPromotionSales promotion covers an infinite array ofactivates to create short-term sales. In recentyears, sales promotion and advertising have beenincreasingly used in an integrated effort to buildbrand loyalty and long-termsales and createanincentive to push the consumer toward an immediatepurchase (sales promotion). Despite the fact thatadvertising and sales promotion are being usedtogether in an united effort to increase profitabilityit is critical that we not blur the fact that advertisingand sales promotion are different in terms ofexecutionandobjectives
Sales Promotion ◼ Sales promotion covers an infinite array of activates to create short-term sales. In recent years, sales promotion and advertising have been increasingly used in an integrated effort to build brand loyalty and long-term sales and create an incentive to push the consumer toward an immediate purchase (sales promotion). Despite the fact that advertising and sales promotion are being used together in an united effort to increase profitability, it is critical that we not blur the fact that advertising and sales promotion are different in terms of execution and objectives
MajorFormsofSalesPromotionSalespromotion has become a routine for mostproduct manufacturers asadvertising. It isestimatedthatover95percentoffirmsmarketing consumer products use some of salespromotion each year.Seenextchart
◼ Major Forms of Sales Promotion ◼ Sales promotion has become a routine for most product manufacturers as advertising. It is estimated that over 95 percent of firms marketing consumer products use some of sales promotion each year. ◼ See next chart
MajorForms ofConsumerSalesPromotionPoint-of-purchaseDisplayofproductsonspot(POP)displaySavings whenpurchasing specifiedCouponsproductsSampleTrial amount of a productConsumers submit their namesSweepstakesfor a drawingConsumerssubmit an entrytobeContestsjudgedOrganizedexhibitionsinspecificTrade showsindustriestoshowcasenew& Exhibitionsproducts..etc
4 Sample Coupons Point-of–purchase (POP) display Sweepstakes Contests Trade shows & Exhibitions Trial amount of a product Savings when purchasing specified products Display of products on spot Consumers submit their names for a drawing Consumers submit an entry to be judged Organized exhibitions in specific industries to showcase new products.,etc. Major Forms of Consumer Sales Promotion
POINT-OF-PURCHSEADVERTISINGPoint-of-purchase(POP)displaydated totheearliest shopkeepers who probablyplaced a crudesign on some slow-moving merchandiseHowever,from its humble beginnings point-of-purchase has become one of the most prevalentand fastest-growing segments of salespromotion. POP has flourished in the self-servicemarketing environment of the past decade.Asone advertising executive pointed out,POP is thelast three feet of the marketing mix,wherecustomer,theproduct,and the dollars cometogether
◼ POINT-OF-PURCHSE ADVERTISING ◼ Point-of–purchase (POP) display dated to the earliest shopkeepers who probably placed a crude sign on some slow-moving merchandise. However, from its humble beginnings point-of– purchase has become one of the most prevalent and fastest-growing segments of sales promotion. POP has flourished in the self-service marketing environment of the past decade. As one advertising executive pointed out, POP is the last three feet of the marketing mix, where customer, the product, and the dollars come together
Thevarietyandcreativityof displaysoffer asuitablemeansof promotingalmost any productPOP continues to add new in-store options. Inaddition,PoPiscontinuallybeingcombinedwithotherforms of sales promotion such as samplingand in-store couponing.The PoP industry is alsomoving into electronic,interactive,and broadcastmedia.Forexample,POPRadioproductsliveradio format tailored to specific retailersand theircustomers,anda number of companiesareoffering shopping cart video and electronicbulletinboards
◼ The variety and creativity of displays offer a suitable means of promoting almost any product. POP continues to add new in-store options. In addition, POP is continually being combined with other forms of sales promotion such as sampling and in-store couponing. The POP industry is also moving into electronic, interactive, and broadcast media. For example, POP Radio products live radio format tailored to specific retailers and their customers, and a number of companies are offering shopping cart video and electronic bulletin boards
Not only are these innovations in POP interestingin themselves, but they point up cone again thatadvertising,promotion,and marketing are onestops and the other begins. Rather than trying todecide in what category a technique belongs,managers are becoming more concerned withusing whatever technigues work
◼ Not only are these innovations in POP interesting in themselves, but they point up cone again that advertising, promotion, and marketing are one stops and the other begins. Rather than trying to decide in what category a technique belongs, managers are becoming more concerned with using whatever techniques work
COUPONSSinceC.W.Post issued thefirstcouponin 1885good for one cent off a box of Grape Nuts Flakes,they have become the most popular form of salespromotion. It is estimated that some 300 billioncoupons will be issued each year in the U.S.A.Manufacturers and retailers annually distributealmost 1,5o0 couponsforevery person intheUnited States. In terms of usage and popularitycouponsarewithout questionthe most familiarform of sales promotion.A number of in-storecouponing methods are being used.Among themthe more popular are distribution of couponbooks in the store or newspaper inserts in racksforstorepatrons
COUPONS ◼ Since C.W. Post issued the first coupon in 1885, good for one cent off a box of Grape Nuts Flakes, they have become the most popular form of sales promotion. It is estimated that some 300 billion coupons will be issued each year in the U.S.A. Manufacturers and retailers annually distribute almost 1,500 coupons for every person in the United States. In terms of usage and popularity, coupons are without question the most familiar form of sales promotion. A number of in-store couponing methods are being used. Among them the more popular are distribution of coupon books in the store or newspaper inserts in racks for store patrons
In addition,many advertisershave moved toin-pack and on-packcoupons (some with immediateredemption).The danger of on-pack coupons isthat you maybe reaching only customers whowould have purchased the product in any case,and doing so at a reduced profit.Manymarketersfearthatcustomersviewcoupons as an expected price reduction and oftensubstitute the best coupons for brand loyalty.Tomany,coupons represent the best example of thedanger of sales promotion replacing brand equity
◼ In addition, many advertisers have moved to inpack and on-pack coupons (some with immediate redemption). The danger of on-pack coupons is that you may be reaching only customers who would have purchased the product in any case, and doing so at a reduced profit. ◼ Many marketers fear that customers view coupons as an expected price reduction and often substitute the best coupons for brand loyalty. To many, coupons represent the best example of the danger of sales promotion replacing brand equity
SamplingWe have emphasized through the text that,regardless of the quality of the advertising andpromotion,ultimately the product must sell itselfThisisthe philosophybehind product samplingSampling isthe free distribution of a productto aprospect market. It virtually guarantees thatconsumers will give a product an initial trial.However,it is the most expensive form of salespromotion and is used to either introduce a newproduct or penetrate new markets with anestablishedone
Sampling ◼ We have emphasized through the text that, regardless of the quality of the advertising and promotion, ultimately the product must sell itself. This is the philosophy behind product sampling. Sampling is the free distribution of a product to a prospect market. It virtually guarantees that consumers will give a product an initial trial. However, it is the most expensive form of sales promotion and is used to either introduce a new product or penetrate new markets with an established one