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Transcript of “ Using incentives to create a perception of greater brand value” Consumer Market sales...
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“Using incentives to create a perception of greater brand value”
Consumer Market sales promotion› Induce household consumers to purchase a
firm’s brand Trade-Market sales promotion
› Motivate distributors, wholesalers, and retailers to stock and feature a brand
Business Market sales promotion› Cultivate buyers in large corporations who
make purchase decisions
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$300 billion in 2008 Growth rate: 4-8 percent Reasons for growth:
› Demand for accountability› Short-term orientation› Consumer response to
promotions› Proliferation of brands› Increased power of retailers› Media clutter
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Short term demand vs. long term demand
Encourages brand switching vs. brand loyalty
Induces trial use vs. encourage repeat
purchase
Promotes price vs. image
Immediate results vs. long term effects
Measurable results vs. difficult to measure
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1. Stimulate trial purchase
2. Stimulate repeat purchases
3. Stimulate larger purchases
4. Introduce a new brand
5. Combat or disrupt competitors
6. Contribute to IBP
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Push Policy Pull Policy
Information Flow
Consumer Consumer
Retailer
Wholesaler
Producer Producer
Wholesaler
Retailer
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Coupons
Price-off deals
Premiums
Contests
Sampling
Sweepstakes
Brand placements
Incentives
Loyalty Programs Trade
Shows
AllowancesGift
Cards
Point of Purchase Displays
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1. Coupons 2. Price-off deals
3. Premiums 4. Contests/sweeps
5. Samples & trials 6. Phone gift cards
7. Brand placements 8. Rebates
9. Frequency programs 10.Event sponsorship
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Entitles a buyer to a price reduction for a product or service
Advantages› Give a discount to price sensitive
consumer while selling product at full price to others
› Induce brand switching› Timing and distribution can be controlled› Stimulates repeat purchases› Gets regular users to trade up within a
brand array
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Coupons are the most widely used form of consumer sales promotion.
Coupons are the most widely used form of consumer sales promotion.
Ad in Context Example
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Disadvantages› Time of redemption cannot be
controlled› No way to prevent current
customers from redeeming coupons
› Coupon programs require costly administration
› Fraud is a serious, chronic problem
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Offers consumer reduced price at point of purchase through specially marked packages
Advantages› Controllable by manufacturer› Can effect positive price
comparisons› Consumers believe it increases
value of a known brand Disadvantage
› Retailers believe it creates inventory and pricing problems
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Premiums: free or at a reduced price with another purchase
Free premiums provide item at no cost
Self-liquidating premiums require consumers to pay most of the cost of the item
Advertising specialties:› A message placed on a
free, useful item
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Premiums attract attention to a brand and offer the consumer something for free.
Premiums attract attention to a brand and offer the consumer something for free.
Ad in Context Example
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Contests: consumers compete for prizes based on skill or ability.
Sweepstakes: winners picked by chance
Both create excitement and interest
But . . .› Legal and regulatory requirements are
complex› Consumers may focus on the game
rather than the brand› Difficult to get an IBP message across
in a game
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Sampling: Giving consumer an opportunity to use a brand on a trial basis with little or no risk
Types of sampling› In-store(Costco) – Newspaper› Door-to-door – On-package› Mail – Mobile (on-site)
Trial offers› Used for more expensive items› Consumer tries product for a fixed
time
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Manufacturers offer either for free or for purchase debit cards› with phone time› or preset spending limits
Examples include offers from Starbucks, Barnes & Noble, and The Gap
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Money back offer requiring the buyer to mail a request for money back from the manufacturer
Often tied to multiple purchases
Many consumers fail to bother sending in the rebate request form
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Also known as continuity programs
Offers customers discounts or free products for repeat patronage
Common in airline, hotel, and restaurant businesses
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Objectives: Uses a “push” strategy: Push the product into the distribution channel to the consumer:–Obtain initial distribution– Increase order size–Encourage cooperation with
consumer market sales promotions– Increase store traffic
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Incentives: Push money Allowances: Merchandise allowances,
slotting fees, bill- back allowances, off-invoice allowances
Sales Training Programs Cooperative (Co-Op) Advertising
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Trade Shows
Business gifts
Premiums and advertising
specialties
Trial offers
Frequency programs
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Trial offers are very effective in the business market. Why?
Trial offers are very effective in the business market. Why?
Ad in Context Example
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Create a price orientation
Borrow from future sales
Alienate loyal customers
Time and expense
Legal considerations
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Definition› Materials used in the retail setting to attract
shoppers’ attention to a brand, to convey primary product benefits, or highlight pricing information.
› Displays may feature “price-off” deals as well.
Objectives for Point-of-Purchase Advertising› Draw consumers’ attention to a brand in the
retail setting.› Maintain purchase loyalty among brand loyal
users.› Stimulate increased or varied usage of the
brand.› Stimulate trial use by users of competitive
brands.
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Product displays and information sheets encourage retailers to support one distributor or manufacturer’s brand over another.
P-O-P promotions can help win precious shelf space and exposure in a retail setting.
A P-O-P display should be designed to draw attention to a brand, increase turnover, and possibly distribute coupons or sweepstakes entry forms.
To combat losing business to online shopping, retailers are trying to enliven the retail environment, and point-of-purchase displays are one strategy.
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Purpose: To reinforce or extend a message being delivered through other media
› Signs, billboards, posters
› Transit
› Aerial
› Specialty
› Directory
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Advantages› Wide local
exposure› Captivating› Around-the-
clock exposure› Address an
immediate need or desire
Disadvantages– Message limits– Location affects
impact– Relatively
expensive– Criticized by
environmental groups
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Transit Ads› Urban environments› Demographic
segmentation› Timely to purchase› Build brand
awareness
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Transit ads can reach a target audience in well defined geographic areas.
Transit ads can reach a target audience in well defined geographic areas.
Ad in Context Example
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Aerial Ads– Blimps increasingly
common– Common at sporting
events– Skies are getting
crowded!– Networks are in
control
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Advantages› High
acceptance› High availability› Final link to
purchase
Disadvantages– Too many
directories– Long lead
times– Limited
creativity New: CD-ROM and Web-based directories
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Web based directories offer convenience and speed.
Web based directories offer convenience and speed.
Ad in Context Example
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Promotional Benefits of Packaging to the Advertiser:
– The package carries the brand name and logo
– The package can communicate “value”
– The package can communicate “image” and “quality”
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Packaging highlights the brand name, quality and image.
Packaging highlights the brand name, quality and image.
Ad in Context Example
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Guerrilla Marketing—”Stunt” promotions
Viral campaigns—Using influencers (Chapter 20)
Special Events—Creating visibility and “affinity” for a brand among a highly select target group