12.1 Devising the Marketing Strategy - Promotion Flashcards
What are the options for promotion at the point of sale (6)
- Price promotions
- Free merchandise
- Limited edition packaging/presentation
- Competitions
- Consumer Tasting
- Staff training and incentives
What are the options for promotion away from the point of sale
- Advertising
- Sponsorship
- Websites
- Social Media
- Smartphone Apps
- Wine tourism
- Events and festivals
- Reviews and awards
- Public Relations (PR)
Types of price promotion (5)
- Discount - specified amount or percentage discount on all or selected items;
- Seasonal sales: e.g. in the run up to Christmas, ‘summer wine’ promotions;
- Discount on certain days (often used by the hospitality trade to encourage business on quieter weekdays);
- Discounts for groups of people: e.g. students, members of the armed forces.
- Multi buy price promotion
Types of “Multi Buy” price promotion
- Buy one, get one free (‘BOGOF’);
- Buy one, get one half price;
- Buy three for the price of two;
- Save an amount/percentage when spending over an amount/number of bottles;
- Hospo - buy a certain amount (i.e 2 x 25cl glasses) and get the rest of the bottle free (in the hospitality sector)
Why are varied promotions important in the marketing plan
Psychographical and behavioural segments - people from different geographical locations with variety of demographics - A single type of promotion not enough to appeal to all so a varied approach is required to connect with as many as possible.
Markets - For products being marketed in more than one country, it is important to be aware of the legal constraints of different countries, in particular in relation to alcohol advertising.
What are the aims of price promotions and who offers them
Many retailers (ex. deep discounters) regularly offer price promotions of one sort or another.
Aims:
- Increase sales of existing products,
- Gain volume sales for new products
- Attract new customers; however
- Bin ends - Shift old stock or discontinued lines.
How do you know if a price promotion has worked?
- Sales when the promotion as ended but they will still be higher than they were before the promotional period.
When is the success of a price promotion judged
When the promotional period has ended and price has returned to normal
If unsuccessful post-promotion sales will be no higher than pre-promotion.
What are the risks of a price promotion
- The promotion may not build consumer loyalty to the product, or even the retailer. - Consumers use price promotions to buy products cheaply - will switch to next brand on special.
- Damage the image of the product in the mind of the consumer, who may come to view the reduced price as the ‘correct’ price and not be willing to pay the full price again. (Champagne has been very concerned about the regular price promotions on their wines in British supermarkets over recent years)
- Financial - Large retailers expect producers to meet the cost of the promotion.
What kind of price promotions are less likely to affect the image of the product but why are they controversal?
Promotions:
- Multi-buys and volume discounts - reduction in the price of the individual products may not be immediately apparent to consumer.
- Link saves - buy one product a reduced price on another product from a different category. So, for example, where a retailer suggests that a particular wine will complement a certain type of food, they may keep the wine at full price but offer a reduction on the food item.
- Discounts on other costs - such as delivery costs (free delivery over xx bottles or $$ purchased)
Controversy:
- Multi buy / volume promotions - seen to encourage excessive alcohol consumption. Banned in (Sweden, Scotland),
- Many countries looking to limit price promotions on alcohol - either by banning them or introducing policies like minimum unit pricing. (premium??)
Benefits / risks of price promotion for wine producers
Benefits:
* increase sales and brand awareness.
Downside:
* Big retailers expect producers to meet the cost, including loss in sales revenue, so may only be financially viable for larger producers.
Advantages and disadvantages of a free merchandise promotion (presentation pack, free gifts)
Advantage:
- Generate sales without the need to reduce the price of a product. (before a national holiday or any other time when alcoholic drinks are given as gifts)
- Big producers also have various promotional items which they offer to consumers who buy their products, such as ice buckets, corkscrews and even items not directly related to wine, like umbrellas (Johnny Barnes).
Disadvantage:
* Available to everyone, it is rarely seen as anything valuable by consumers and is unlikely to create many additional sales.
When is limited edition packaging offered and what are it’s advantages/disadvantages
- Super-premium wines - exclusive elaborately designed presentation cases for particular wines.
Advantages: - Prized by wine investors and so contribute to the luxury brand image.
- Linked to major events (football World Cup/Olympic Games)
- Can be recurring: Champagne Lanson’s limited edition packaging to tie in with its sponsorship of the Wimbledon Tennis Championships
Adv/Disadvantages
- When recurring can help promote the brand’s image.
- Otherwise seen by consumers as little more than a bit of fun: may attract some but does not increase sales long term
Why are competitions used and what are their advantages and disadvantages
Used:
Encourage consumers to buy a particular product.
* NZ wine producer offers a chance to enter a draw to win a holiday in NZ.
Advantages:
- Gives consumers the chance to win something exclusive (c.f merchandise) (more attractive, high value)
- Opportunity to collect consumers’ contact details which they can use for further promotions (see data protection laws in the relevant jurisdiction)
Why are in store tastings valuable and what are the advantages and disadvantages
Disdadvantages
* Cost - opening bottles which could have been sold. (distributors/producers may provide free bottles for tasting)
Advantages:
- Offering tastings increases sales (studied)
- Low involvement consumers nervous about spending money on wine they may not like.
- Repeat customers -any customers that try the wine and like it are more likely to buy again.
- May buy something else from the shop, even if they do not like the wine on offer.
