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Mark 3323 Test 3

Terms in this set (54)

Sales Promotion
Using incentives to create a perception of greater brand value, designed for instant demand stimulation.
- Price Reductions
- Free Samples
- Prizes
Also includes other incentives for consumers to try a brand or for a retailer to feature a brand in a store.
Sales Promotion- Consumer Market
Induce household consumers to purchase a firm's brand. The intent is to generate short term increases in sales by motivating trial use, encouraging larger purchases, or stimulating repeat purchases.
- Coupons
- Price-off deals
- Premiums
- Contests and sweepstakes
- Sampling and trial offers
- Rebates
Sales Promotion- Trade Market
Motivate distributors, wholesalers, and retailers to stock and feature a brand
- Point-of-Purchase displays
- Incentives
- Allowances
- Cooperative Advertising
- Sales training
Sales Promotion- Business Market
Cultivate buyers in large corporations who make purchase decisions about a wider range of products including computers, office supplies, and consulting services.
- Trade Shows
- Premiums
- Incentives
- Loyalty/frequency programs
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
Objectives for Consumer-Market Sales Promotion- Stimulate Trial Purchase
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 effort
Consumer-Market Sales Promotion Tools- Coupons
Entitles a buyer to a price reduction for a product or service

Advantages
-Give discount to price sensitive consumers while selling brand 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

Disadvantages
-Timing of redemption cannot be controlled
-No way to prevent current, brand loyal customers from redeeming coupons
-Coupon programs require costly administration
-Fraud is a serious, chronic problem
Consumer-Market Sales Promotion Tools- 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
Consumer-Market Sales Promotion Tools- Premiums
Premiums: a free or reduced price item with purchase of another item

Free premiums provide item at no cost to consumer

Self-liquidating premiums require consumers to pay most of the cost of the item

Advertising specialties:
-A message placed on a free, useful item: pens, ball caps, coffee mugs
Consumer-Market Sales Promotion Tools- Contests/Sweeps
Contests: consumers compete for prizes based on skill or ability
-Sweepstakes: winners picked by chance
-Both create excitement and brand interest

Disadvantages
-Legal and regulatory requirements are complex
-Consumers may focus on the game rather than the brand
-Difficult to get an IBP brand feature message across in a game
Consumer-Market Sales Promotion Tools- Samples and Trials
Sampling: Giving consumer an opportunity to use a brand on a trial basis with little or no risk

Types of sampling
-In-store (Costco)
-Newspaper
-Door-to-door
-On-package
-Mail
-Mobile

Trial offers
-Used for more expensive items
-Consumer tries a brand for a fixed time (week, month)
Consumer-Market Sales Promotion Tools- Phone Gift Cards
Manufacturers offer either for free or for purchase debit cards
-Cell phone time
-iTune downloads
-Preset spending limits

Examples include offers from Starbucks, Barnes & Noble, and The Gap
Consumer-Market Sales Promotion Tools- Rebates
-Money back offer often requiring the buyer to mail a request for money back from the manufacturer

-Can be used for large ticket items as well

-Often tied to multiple purchases

-Many consumers fail to bother sending in the rebate request form - "slippage"
Consumer-Market Sales Promotion Tools- Frequency Programs
-Also known as "continuity" programs

-Offers customers discounts or free products for repeat patronage

-Common in airline, hotel, and restaurant businesses
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 at retail
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