module 10 sales promotion Flashcards
- What are the three key aspects of Sales Promotions?
An extra incentive to buy- something as simple as a coupon is enough interactive for someone to buy. Referring back to the consumer decision making process getting customers to try a product takes them right to step 4 of the process
A tool to accelerate- if a sales promotion gets customers off the couch and causes them to act now. That can be a good and bad. Take for example a high value coupon on a pack of whitening strips unit sales will go up, but this will impact future sales as people stock up. Sales promotion brings sales forward and can this cannibalize future sales. The idea is to have the good outweigh the bad.
Can be targeted to different segments: Sales promotion and direct marketing are aspects of IMC can be highly targeted therefore orgs must be careful not to discriminate
- Differentiate between consumer oriented and trade oriented sales promotions. Which is a push
which is a pull strategy?
Consumer oriented sales promotion def: sales promotion techniques that are targeted to the ultimate consumer such as coupons, samples, contests, rebates, sweepstakes, and premium offers
Consumer oriented is more of a pull strategy
Trade oriented def: a sales promotion designed to motivate distributers and retailers to carry a product and make an extra effort to promote it to their consumers
Trade oriented is more of a push strategy
- What are the main reasons why sales promotions have increased in recent years?
The sales promotion industry has matured over the past several decades. Increased sophistication and a more strategic role and hocus have elevated the discipline. Many promotion agencies have expanded their capabilities and expertise and now offer clients a variety of integrated marketing services.
- What is meant by consumer franchise and non-franchise building promotions?
Consumer franchise building def: sales promotion activities that communicate distinctive brand attributes and contribute to the development and reinforcement of brand identity
Non franchise building Def: sales promotion activities that are designed to accelerate the purchase decision process and generate immediate increase in sales but do little or nothing to communicate information about a brand and contribute to its identity and image.
- Why is sampling and coupons powerful promotional tools? When is sampling most appropriate?
Sampling is the most effective way to generate trial, as a sales technique sampling is generally considered when a new product is being introduced to the market.
Couponing is the most widely used and most effective sales promotion tool they are used by almost all the packaged goods firms
- What are the advantages and limitations of coupons?
Advantages
They can encourage non users to buy a brand
Encourage repeat purchases among current users
Get users to try a new and improved version of the brand
Disadvantages
Difficult to prevent current users from using the coupons
Low redemption rates and high costs
Mis redemption
- What are the two types of premiums?
Premium definition an offer of an item of merchandise or service wither free or at a low price that is used an extra incentive for purchasers
Free premiums are usually small gifts or merchandise included in the product package or sent to consumers who mail in a request along with proof of purchase. In/on package free premiums include toys, balls, trading cards, or other items enclosed in cereal packages
Self liquidating premiums def: premiums that requires customer to pay some or all the cost of the premium plus handling and mailing costs
The marketer usually purchases items used as self liquidating in large quantities and offer them to customers at lower than retail prices. The goal is not to make a profit on the premium item but rather cover the costs and offer value to the customer
- What are “slotting allowances or fees”?
Def: fees that must be paid to retailers to provide a “slot” or position to accommodate a new product on the store shelves
- What are the problems associated with Trade Allowances? What is meant by “forward buying”
and “diverting?”
Trade allowance def: a discount or deal offered to retailers or wholesalers to encourage them to stock promote or display a manufacturers product
- Many marketing and advertising executives are concerned about the detrimental effects of too
many sales promotions. Understand what these negative effects might be.
Some critics argue that sales promotion increases come at the expense of brand equity money put into sales promotion instead of advertising devalues the brand
Encourage consumers to purchase soley on a price basis
Brands would rather rely on advertising to help build their brand apposed to sales promotion but people have become accustom to sales promotion
Temptation to get that quick fix and spike of sales
