Sales Promotion Flashcards
Growth of sales promotion (9)
1) changing economic conditions
2) growing power of retailers
3) declining brand loyalty
4) increased promotional sensitivity
5) brand proliferation
6) fragmentation of consumer markets
7) short term focus of marketers
8) increased accountability
9) need to penetrate the clutter
Objectives of consumer orientated sales promotion (5)
1) obtain trial and repurchase
2) to increase consumption of an already established brand
3) to define and maintain current market
4) to target a specific target market
5) to enhance IMC efforts and build brand equity
Consumer orientated sales promotional vehicles (8)
1) samples
2) coupons
3) premiums
4) contests/sweepstakes
5) refunds/rebates
6) bonus parks
7) price off deals
8) loyalty programs
Sampling
- definition
- when it works best
1) definition- giving the consumer some quantity of the product at no charge to induce their trailing of the product.
2) works best:
- the products are of relatively low unit value so samples do not cost much
- the products can be broken into smaller sizes that can reflect the products features and benefits.
- the purchase cycle is relatively short so the consumer can purchase in a relatively short period or time.
Sampling distribution methods (7)
1) door to door
2) direct mail
3) in store
4) on packaging
5) event
6) inserts
7) Internet
Advantages of sampling (4)
1) effective in inducing trial
2) risk free process for prospective trailers
3) consumers experience brand directly
4) provides an opportunity to appreciate brand benefits
Limitations of sampling (4)
1) expensive to initiate
2) potential for wastage
3) doesn’t suit all products
4) ROI reliant on sufficient adoption at full price
Coupons
- definition
- 2 points
1) printed promotional device that rewards consumers for purchasing the coupon offering brand discounted or free merchandise
- the oldest and a widely used sales promotion
- used by virtually all packaged goods manufacturers
Advantages of coupons (4)
1) appeal to prices entice consumers
2) can offer price break without retailers cooperation
3) can be effective way to induce trail of new or existing products
4) can be a way to defend market share and encourage repurchase
Disadvantages of coupons (4)
1) difficult to determine how many consumers will use coupons and when
2) coupons are often used by loyal consumers who may purchase anyway
3) declining redemption rates and high costs of couponing
4) mis redemption and fraud
Premiums
- definition
- 2 types and definition
1) an offer of an item of merchandise or service either free or at a low cost that is an extra incentive for customers
2) two types
- free premiums: only require purchase of product
- self liquidating premiums: require customer to pay some or all of the cost of the premium
Event marketing
Promotion where a company or brand is linked to an event of where a themed activity is developed for the purpose of creating experiences for consumers and promoting a product or service
Event sponsorship definition
A type of promotion whereby a company develops sponsorship relations with a particular events such as a concert, sporting competition or other activity .
Contests/sweepstakes
- definition of each
1) contests - 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
2) sweepstakes - a promotion where winners are determined purely by chance and cannot require a proof of purchase as condition of entry. Winners are chosen by random selection from a pool of entries of generation of a number to match those held by game entrants.
Benefits (4) and trends (2) of contests and sweepstakes
1) benefits
- get consumers involved with the brand
- generate interest and excitement
- help build brand equity/target groups
- encourage additional/repeat purchase
2) trends
- involvement of specialist firms
- online and SMS entry
Problems with contests and sweepstakes
1) do not always contribute to brand building
2) focus not on brand
3) effectiveness
4) legal considerations
5) May generate negative publicity
6) use by professionals or hobbyists
Strategies for improved return on contests/sweepstakes (5)
1) offer a popular grand prize
2) give more than one prize
3) make it easy to participate
4) make it easy to understand
5) ensure there is good perceived chance of winning
Bonus packs
- definition
- advantages (4)
- disadvantages (2)
1) definition - special packaging that provides consumers with extra quantities of merchandise at extra cost e.g. Loreal 20% extra at no extra cost
2) advantages
- provides extra value without having to get involved with complicated coupons or refunds
- generally obvious to the consumer
- may result in large purchase orders and favourable display space
3) disadvantages
- usually require additional shelf space without providing any extra profit margins for the retailer
- may appeal primarily to current users who would probably have purchased the brand anyway or to promotion sensitive consumers who may not become loyal to the brand.
Loyalty programs
- definition (1)
- advantages (3)
- disadvantages (1)
1) definition - a type of promotional programs that rewards consumers for the same brand of a product or service over time.
2) advantages
- marketers view them as a way of encouraging consumers to use their products or services in a continual basis
- consumer retention and building relationships
- continually develop data bases
3) disadvantages
- been argued that many of the loyalty programs developed by marketers are really short term promotions that over reward popular users and do little to develop long term loyalty.
Refunds and rebates
1) definition
2) advantages (2)
3) disadvantages (2)
1) definition - an offer by a manufacturer to return a portion of a products purchase price, usually after the consumer supplies a proof of purchase
2) advantages
- can encourage repeat purchase behaviour
- temporary price reduction
3) disadvantages
- some users not motivated by a refund because of the delay and effort required to obtain the savings
- can’t be bothered due to keeping receipts, filling in forms or mailing the offer.
Trade orientated sales promotions definition
A sales promotion designed to motivate distributors and retailers to carry a product and make an extra effort to promote or push it to their customers
Trade orientated sales promotions objectives (4)
1) obtain distribution of new products
2) maintain trade support for existing products
3) build retail inventories
4) encourage retailers to display existing brands.
Types of trade orientated promotions (6)
1) contests and incentives
2) trade allowances
3) point of purchase displays
4) sales training programs
5) trade shows
6) cooperative advertising
Contents and incentives (2)
- can be directed towards managers who work for a wholesaler or distributor as well as towards store or department managers at the retail level.
- often targeted at the sales personnel of the wholesalers, distributors/dealers or retailers.
