Sales Promotions

Question 1

What are sales promotions?

Answer 1

• Incentives used to stimulate sales of a specific product/service by changing prices or adding perceived value in the short term (Eagle et al)

Question 2

What is an added value sales promotion?

Answer 2

These involve buying a product at the normal price but receiving accessories or complementary products for free

Question 3

What can’t sales promotions compensate for?

Answer 3

Weaknesses in other areas of the marketing mix such as a lack of advertising budget or inadequacies in sales force or distribution

Question 4

What are the factors driving increased sales promotions?

Answer 4

• Increased fragmentation of traditional media and the ease at which adverts can be avoided means reaching/motivating consumers through traditional methods has become more difficult and expensive
• It allows for return on investment to be more easily measured than when its done through traditional advertising

Question 5

What are the four groups consumers can be split into based on their proneness to use promotions
(PBBP)

Answer 5

1) Brand loyal consumers - Purchase only one particular brand or product and won’t substitute a competing brand regardless of the type of promotion on offer
2) Promotion prone consumers - those who regularly respond to promotions and like to purchase when they are on deals
3) Brand preference consumers - Have a small set of brands which they have an attachment to, when the chosen brand offers a promotion, its that one thats purchased, they ignore the promotion of brands not in the preferred set
4) Price sensitive - Take advantage of any type of promotion regardless of the brand

Question 6

What are the types of sales promotions?

Answer 6

• coupons
• bonus packs
• price off
• premiums
• Prize drawers
• Sampling

Question 7

What are the type of coupons?

Answer 7

• Instant redemption
• Bounce back coupons
• Scanned delivered coupons
• Cross ruffling coupons

Question 8

What are the methods of distributing coupons?

Answer 8

• Print media (inserts)
• Direct mail
• Digital mail

Question 9

What are the disadvantages of coupons?

Answer 9

• 80% of consumers that use coupons are brand preference consumers, meaning they would have purchased the product anyway, reducing revenue for the brand
• May redeem counterfeit ones unexpectedly
• Most consumers expect them to pull in consumers so may be lazy with advertising

Question 10

Whats the key to successful premiums?

Answer 10

• Must match the target market
• be carefully selected (avoid ads, try for exclusivity)
• Reinforce a firms image and products
• Should be integrated with other components of the imc program
• Shouldn’t be expected to increase short term profits

Question 11

What is sampling?

Answer 11

The delivery of free goods or services, based on the idea the consumer will like the brand and therefore re purchase
e.g may be 7 day free gym membership

Question 12

benefits of sampling?

Answer 12

• introduce new products to consumers
• generate new interest
• allow companies to collect information
• Boost sales

Question 13

Whats involved with a contest?

Answer 13

• Require the contestant to perform an activity

- Often required to purchase something in order to enter

Question 14

Whats involved with prize draws?

Answer 14

• Consumers can enter as many times as they wish but may be some restrictions
• No purchase required to enter

Question 15

What is extrinsic value and intrinsic value?

Answer 15

Extrinsic value - Attractiveness of prize

Intrinsic - relates to the skill/entertainment involved in playing

Question 16

What is a price off?

Answer 16

This is a temporary price reduction that may physically be marked on a product/its shelf

Question 17

Benefits and weaknesses of price offs?

Answer 17

B - Stimulates sales,Entices consumers to try new products, encourage brand switching, grants immediate rewards
w - May have negative impact on profits, encourage consumers to become price sensitive, potential negative impact on brand image if used too much

Question 18

What is meant by a hedonic product?

Answer 18

Products consumer primarily for the affective/sensory gratification
- More hedonic a product is the more favourable consumers overall evaluation is of the gift emotion

Question 19

What is deal proneness?

Answer 19

A proneness to repond to promotions bc they are in deal form which results in higher consumer purchase intentions

Question 20

What is meant by value expressions?

Answer 20

The sales promotions abilities to enable consumers to express and enhance self perceptions

Question 21

Whats the difference between proactive and reactive pr?

Answer 21

Proactive- Originates within a company and is a planned aspect of the overall marketing strategy
Reactive- Usually defensive and reasoning the pressures and influences outside the company