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Marketing 306 Sales Promotion AT1
Terms in this set (14)
Definition of sales promotions
Sales promotion includes all marketing communications activities that attempt to stimulate buyer action or immediate sales of a product. In comparison, advertising is designed to accomplish communication objectives, such as creating brand awareness and influencing customer attitudes. Sales promotions are directed at trade intermediaries, such as wholesalers and retailers, or at consumers.
Advantages of sales promotions
1) Effective at changing behaviour in short run
2) Very flexible
3) Facilitate introduction of new products.
4) Hold current users.
5) Increase product usage
Disadvantages of sales promotions
1) Easily abused
2) Can lead to promotion wars
3) Easily duplicated
What is Franchise Building?
Adds to long-term value of the brand
Example: Increase in brand loyalty through frequent flyer promotions, or reward points
What is Non-Franchise Building?
Creates short-term brand value
Sometimes criticized for leading customers to buy on price rather than brand image
The premier sales promotion device for generating trial usage by delivering an actual- or trial-sized product to consumers. Unless consumers buy your product, there is very little opportunity for them to experience its intrinsic attributes. By letting the consumer use your product or service for free, they can build familiarity with your brand.
When should sampling be used?
1) Brand is demonstrably superior/has distinct relative advantages
2) Sample can be made cheaply or original product can be easily devisable
3) Concept is difficult to communicate by advertising alone
4)When brand has small market share or product is new
Problems with Sampling
• Won't work for some products
• Mishandling in distribution
• Distributed to the wrong market
• In- or on-package samples do not capture current non-consumers
• Can fail to reach sufficient numbers of consumers to justify its expense
• May be misused by customers
• Loss of control
What is a push strategy?
A push strategy is based on a manufacturer's promotional efforts - such as personal selling, trade advertising and trade-oriented sales promotion - directed at the wholesalers and retailers to gain their trade support. With a combination of sales influence, advertising and, especially, promotions in the form of allowances and other deals, manufacturers 'push' channel members to increase their inventories of the manufacturer's brand versus competitive brands.
What is a pull strategy?
A pull strategy, however, is directed to the ultimate consumers with the intent of influencing their behaviour to purchase the manufacturer's brand. The aim of a pull strategy is to encourage consumers to seek out those retailers that stock the particular brand as a result of a manufacturer's successful advertising and consumer promotion efforts.
What is push or pull most appropriate for?
Push is most appropriate when their is low brand loyalty in a category. Pull is most appropriate for products that have high brand loyalty, where consumers know the differences between various brands.
Examples of pull strategy
2) Coupons/ Vouchers
3) Purchase premiums
5) Bonus Packs
6) Special Prices
7) Sweepstakes/ Competitions
Examples of push strategy
1) Trade allowances- If you buy this quantity of medicine you can have a voucher or a discount
2) Trade shows- special deals
3) Point of sale displays- If you purchase this product we will give you a free in-store display
4) Sales training incentive- If you purchase this product we will train your staff for you
Three types of sales promotions
1) Customers (Pull Strategy)
Using consumer advertising to pull the product through the channel of distribution
2) Retailers (Push Strategy)
Using promotional efforts to push the product through the selling chain
3) Sales force (Encouragement Strategy)
Using promotional efforts to encourage the sales force to work harder
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