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Advertising and Promotional Strategy > Lecture 11 > Flashcards

Lecture 11 Flashcards

1
Q

Sales Promotion

A

“A direct inducement that offers an extra value or incentive for the product to the sales force, distributors or the ultimate consumer with the primary objective of creating an immediate sale.”

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2
Q

Sales promotion involves some type of inducement that…

A

…provides an extra incentive to purchase the product or service.

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3
Q

Sales promotion is essentially an acceleration tool that is …

A

…designed to speed up the selling process and maximize sales volume.

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4
Q

Sales Promotion can be broken into two major categories:

A

Consumer-oriented sales promotion

Trade-oriented sales promotion

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5
Q

Consumer-oriented sales promotion

A

directed at the consumers who are final purchasers of goods and services.

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6
Q

Trade-oriented sales promotion

A

designed to motivate distributors and retailers to stock and promote a manufacturer’s product.

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7
Q

Reasons for Increase in Sales Promotion

A 
Growing Power of Retailers
Declining Brand Loyalty
Increased Promotional Sensitivity
Brand Proliferation
Fragmentation of Consumer Markets
Short-Term Focus of Marketers
Increased Accountability
Competition
The Growth of Digital Marketing
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8
Q

Mkters also spend $150B/yr on trade sales promotion

A

Sales promotion spending grew from $56B in 1991 to projected $310B in 2021

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9
Q

Private label brands account for __ of CPG sales.

A

15-20%

Eg: Aldi, Trader Joe’s, Target, Costco, Amazon, etc.

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10
Q

The “Outdoor Adventure Sweepstakes” is an example of…

A

…a franchise-building promotion that contributes to the

image of the Avalanche as a rugged vehicle for the outdoors.

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11
Q

CFB Promotional Objectives

A

Communicate distinctive brand attributes
Develop and reinforce brand identity
Build long-term brand preference

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12
Q

CFB Techniques and Practices Can convert customers

to…

A

…loyal customers.

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13
Q

CFB Techniques and Practices

A

“Frequency” programs encourage patronage loyalty

Contests and, sweepstakes that increase involvement and help build equity

Premium offers that reinforce the brand image and help build equity

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14
Q

(CFB)

A

Consumer Franchise-Building Promotions

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15
Q

(non-FB)

A

Nonfranchise-Building Promotions

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16
Q

Non-FB Promotional Objectives

A

Accelerate the purchase decision process

Generate an immediate sales increase

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17
Q

Non-FB Promotions . . .

A

Do not identify unique brand features

Do not contribute to brand identity or image

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18
Q

Objectives of Consumer-Oriented Sales Promotion

A

To Increase Consumption of an Established Brand

To Target a Specific Segment

Enhance IMC Efforts and Build Brand Equity

To Defend (Maintain) Current Customers

To Obtain Trial and Purchase

To Target a Specific Segment

To Defend (Maintain) Current Customers
‘load customers with your product’

To Increase Consumption of an Established Brand

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19
Q

Consumer-Oriented Sales Promotion Vehicles

A 
Samples
Coupons
Premiums
Contests/sweepstakes
Refunds/rebates
Bonus Packs
Price-off Deals
Loyalty/Frequency Programs
Event Marketing
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20
Q

Trade-Oriented Sales Promotion Vehicles

A 
Contests, Dealer Incentives
Trade Allowances
Point-of-purchase Displays
Training Programs
Trade Shows
Cooperative Advertising
21
Q

Sales Promotion Vehicles
~ Sampling
Sampling Works Best When…

A

The products are of relatively low unit value, so samples don’t cost much

The products are divisible and can be broken into small sizes that can reflect the products features and benefits

The purchase cycle is relatively short so the consumer can purchase in a relatively short time period

22
Q

Sales Promotion Vehicles

-Sampling Methods

A 
Door-to-door
Direct Mail
Central Location Distribution
In-store Sampling
Cross-product Sampling
Co-op Package Distribution
With Newspaper / Magazine
Event Sampling
Internet Sites
23
Q

Sales Promotion Vehicles

~ Coupons

A

The oldest and most widely used sales promotion tool

Nearly 240 Billions Distributed Each Year in the US

60 percent of consumers use coupons and 14% use them regularly

24
Q

Shoppers save __ annually using coupons

A

$3 B

25
Q

Advantages of Coupons

A

Appeal to Price Sensitive Consumer
Can Offer Price Break Without Retailers Coop
Can Be Effective Way to Induce Trial of New or
Existing Products
Can Be Way to Defend Market Share and Encourage Repurchase

26
Q

Disadvantages of Coupons

A

Difficult to Determine How Many Consumers Will Use Coupons and When

Coupons Are Often Used by Loyal Consumers Who May Purchase Anyway

Declining Redemption Rates and High Costs of Couponing

Misredemption and Fraud

27
Q

__ are the Most Popular Types of Coupons

A

FSIs

28
Q

Sales Promotion Vehicles
~ Premiums

Two Types of Premiums

A

Free Premiums

Self-liquidating Premiums

29
Q

Premium

A

an offer of an item of merchandise or service either free or at a low cost that is an extra incentive for customers.

30
Q

Free Premiums:

A

Only Require Purchase of the Product

31
Q

Self-liquidating

Premiums:

A

Require Consumer to Pay Some or All of the Cost of the Premium.

32
Q

Premiums attract attention to a brand and

A

offer the consumer something for free

33
Q

Most Successful Use of Premiums

A

McDonalds

34
Q

Airline miles are a very popular __ incentive

A

Premium

35
Q 
American Airlines launched its
Aadvantage frequent flier
program in 1981 and has
become the largest loyalty
program of any kind with over
45 million members.
A 
This program, as well as others
such as United Airline’s Mileage
Plus, have made airline miles a
promotional currency as the
airlines make more than $2.5
billion each year selling miles
to other marketers who use
them as promotional
incentives.
36
Q

Contests:

A

a promotion where consumers compete
for prizes or money on the basis of skills or ability.
Winners are determined by judging entries or
ascertaining which entry comes closest to some
predetermined criteria.

37
Q

Sweepstakes/games:

A

a promotion where winners are determined purely by chance and cannot require a proof of purchase as a condition for entry. Winners are chosen by random selection from a pool of entries or generation of a number to match those held by game entrants.

38
Q

Contests can be used to build…

A

brand equity.

The “Do You Know a
Brawny Man?” promotion
was very successful as sales
volume during the
promotional period grew
12.3%, which was 5 times
more than the product
category and Brawny’s
market share increased
from 10% to 11.5%.
The promotion also received
the Super Reggie Award
from the Promotion
Marketing Association as
the best promotion of the
year.
39
Q

Sweepstakes Can Help Build…

A

Brand Equity

40
Q

Gerber developed a __ in conjunction with

a __ __.

A

sweepstakes, loyalty program

41
Q

Other Promotional Tools

A 
Bonus Packs
Price-off Deals
Refunds and Rebates
Event Marketing
Frequency/ Loyalty Programs
42
Q

Trade-Oriented Sales Promo

- Objectives

A

Obtain Distribution of New Products
Maintain Trade Support for Existing Products
Build Retail Inventories
Encourage Retailers to Display Existing Brands

43
Q

Marketers target the trade with

A 
collateral pieces that are
designed to provide them with
information and encourage them
to stock and promote their
products.
The tuna salad kit was named
one of the top 10 new food
products at the annual New
Products Conference.
Chicken of the Sea International
does not do much media
advertising but rather relies
heavily on consumer and trade
promotions to market its
products.
44
Q

Trade-Oriented Sales Promo

- Types of Trade-Oriented Promotions

A 
Contests and Incentives
Trade Allowances (Buying Allowances, Promotional
Allowances, Slotting Allowances)
Point-of-Purchase Displays
Sales Training Programs
Cooperative Advertising
Trade Shows
45
Q

Trade-Oriented Sales Promo

- Types of Cooperative Advertising

A

Horizontal Cooperate Advertising
Ingredient-Sponsored Coop Advertising
Vertical Cooperative Advertising

46
Q

The “Intel Inside” Campaign Is an Example of…

A

…Ingredient-sponsored Cooperative Advertising.

The “Intel Inside” campaign has been used since 1991. This campaign is part of a cooperative advertising program as personal computer companies are reimbursed 5 percent of what they pay for Intel chips with the money to be applied to ads they run carrying the “Intel Inside” logo.

47
Q

The Sales Promotion Trap

A

Our Firm: Cut back promotions
All Other Firms: Cut back promotions
- Higher profits for all

Our Firm: Maintain promotions
All Other Firms: Cut back promotions
- Market share goes to our firm

Our Firm: Cut back promotions
All Other Firms: Maintain promotions
-Market share goes to all other firms

Our Firm: Maintain promotions
All Other Firms: Maintain promotions
-Market share stays constant; profits stay low

48
Q

In many situations there is the potential for

companies to fall into a ‘sales promotion trap’ or…

A

…downward spiral whereby all competitors are

making extensive use of promotions.

49
Q

Abuse of Sales Promotions

A
  1. Marketers becoming too dependent on using sales promotion to produce short-term or immediate increases in sales.
  2. Investing in sales promotion at the expense of advertising and thus not building the long-term value of the brand franchise.
  3. Brands losing their perceived value from the perspective of consumers when they are purchased because of a promotional offer.

Advertising and Promotional Strategy (12 decks)

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