Learning Objectives

CHAPTER 13
Identify the roles of various consumer and trade promotion activities in the marketing communications process Outline the nature of various consumer and trade promotion activities Assess the strategies for integrating sales promotions into the marketing communications mix

Sales Promotion

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Sales Promotion
Activity that provides special incentives to bring about immediate response from: Consumers,
Distributors, Organizations sales force.

Sales Promotion
Can be subdivided into 2 broad categories: 1. Consumer promotions
Designed to stimulate purchases by consumers (ultimate users) Help pull the product through the distribution channels focus on achieving trail purchase and repeat multiple purchases and building brand loyalty.

2. Trade Promotions
Designed to encourage distributors to purchase more additional volume and provide encouraging merchandise support to stimulate consumer purchase. Help push the product through the distribution channels
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Sales Promotion Planning

In todays environment, where planners consider an integrated marketing approach, sales promotions are not viewed as separate entities Sales Promotions are planed at the same time to ensure that synergies are achieved across all forms of communications. Promotion activity must complement the total marketing effort.

Sales Promotion Objectives

Objectives of consumer promotions focus on achieving:
Trial purchase Repeat or multiple purchases Building brand loyalty

Objectives of trade promotions focus on:

Selling more volume of merchandise Encouraging merchandising support among channel members that buy and resell products.

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Promotion Strategy
Pull Marketer Wholesaler Retailer Consumer

Consumer Promotion Pull Strategy

Pulls the product through the channel

Marketer

Distributors

Consumers

Marketer

Wholesaler

Retailer

Consumer

Objectives:
Trial purchase Brand loyalty Multiple purchase
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Push
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Types of Consumer Promotion Activity

Coupons Free Samples Contests Cash Refunds Premium Offers Loyalty (Frequent- Buyer) Programs Delayed Payment Incentives Combination Offers

Coupon Distribution

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Objectives of Coupon Programs

Non-brand users to make trail purchase Maintain current users Speed up acceptance of a new product Encourage current customers to repurchase the brand (build loyalty) Attract users of competitive brands Encourage multiple purchases Increase seasonal sales
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Methods of Coupon Distribution

Coupons can be delivered to consumers in four different ways, by:
Product Media In-Store at the point-of-purchase Electronically

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Average Redemption Rates by Method of Delivery

Free Samples
Free product distributed to potential users in a trial or regular size, effective for achieving trial purchase.
In-store samples most common, plus: Cross-sampling
Co-operative direct mail Event sampling Sample packs

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Contests
Contests are designed and implemented to create temporary excitement about a product.
Sweepstakes Games / Instant Wins
Successful contests have significant media advertising support.

Cash Refunds (Rebates)

Money returned directly to the consumer by the manufacturer after the purchase has been made.
Reinforce loyalty and multiple purchases Slippage commonly occurs Successful refund offers require strong P-O-P support

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Premium Offers
An item offered free or at a bargain price to encourage consumers to buy a specific product. It is usually offered three ways.
1. Mail-in 2. In/On Pack 3. Coupon Offer at P-O-P

Loyalty (Frequent-Buyer) Programs

A frequent buyer program offers consumers a bonus, such as points or play money.
Canadian Tire Money

Club Z at Zellers and Bay Shoppers Drug Marts Optimum Card

The goal is to encourage loyalty through repeat purchases.
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Delayed Payment Incentives

Consumers are granted a grace period during which he or she pays no interest or principal for the item purchased.
Leons Dont Pay a Cent Event Home Depot
For renovations and household repairs, they offer six-month and one-year interest-free financing packages This gives them a competitive edge over independent contractors who demand payment when jobs are completed.
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Trade Promotion Push Strategy

Pushes the product through the channel

Marketer

Distributors

Consumers

Objectives:
Secure listings Build sales volume Secure merchandising support
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Trade Promotion Planning

Three basic objectives: secure a listing, build volume, and encourage merchandise support.
Trade Allowance Performance Allowance Co-operative Advertising Allowance
Continued

Trade Promotion Planning (cont.)

Retail In-Ad Coupons Dealer Premiums Collateral Material Dealer Display Material (P-O-P) Trade Shows Branded Promotion Merchandise

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Trends in Sales Promotion Planning

In the packaged goods market there has been a steady shift toward trade promotion, largely due to:
Media Fragmentation Demand for accountability Buying-Power Concentration

Sales Promotion Integration with Marketing Communications

Promotion strategies must be integrated with other marketing communications activities. Strategic decisions must consider:
Frequency of Promotion Activity Promotion/Product Relationships Creative Strategy Media Strategy

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