Part 5 Principles: IMC and Total Communication Copyright © 2012 Pearson Education, Inc. publishing...

Chapter 17: Promotions

Part 5Principles: IMC and Total Communication

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 17-1

What are the current trends and practices in planning promotions?

How are various consumer promotions used?

What are the types and purposes of trade promotions?

How do multiplatform promotions—sponsorships and events, loyalty programs, and partnership programs—work?

How are promotions used strategically in marketing in terms of brand building, integration, and effectiveness?

Questions to Explore


Why Sales Promotion?


Sales promotion: increasing the value of its product or brand by offering an extra incentive to purchase it.

Designed to encourage action.

Sales promotion is primarily designed to motivate people to act by offering incentives.

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Why sales promotion?

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The Promotion Marketing Association (PMA) defines sales promotion as:

“The media and non-media marketing pressure applied for a predetermined, limited period of time at the level of consumer, retailer, or wholesaler in order to stimulate trial, increase consumer demand, or improve product availability.”


Why sales promotion?

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Accountability Managers are under pressure for short-term profits.

Promotions cost less and deliver tangible results.

Evaluation is easy and quick because there is usually an immediate response.

It’s easier to compute return on investment (ROI). This is known as payout planning.


Why is sales promotion growing?

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To see how sales promotion can generate positive ROI, go to:

www.moonfruit.com

Here, the Moonfruit company gave away 10 MacBook Pros as part of a birthday celebration. Participants were required to send out a creative Tweet. The idea exploded on Twitter and generated massive publicity for the company.



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http://www.moonfruit.com/

Media shifts Traditional media costs have escalated to the

point where alternative media must be considered.

Promotions cost less and deliver tangible results.

Global incentive programs have increased dramatically.



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Marketplace changes

Consumer behavior: shoppers are more likely to switch brands.

Pricing: consumers expect coupons, sales, price promotions.

Market share: increased switching leads to increased market share.

Parity products: promotions can become a tie-breaker in consumer decision making.

The power of the retailer: dominant retailers such as Safeway and Wal-Mart demand promotional incentives.



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Promotional Big Ideas The Big Idea is just as important for sales

promotion as it is for advertising.

In many cases, the promotion is part of a bigger IMC campaign.

The challenge is to come up with exciting, interesting promotional ideas that are involving and capture the attention of the target market.


Sales promotion planning

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1. Consumer

2. Trade

3. Sales Force


What are the primary categories of sales promotion?

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Consumer Promotions


Price Deals Temporary price reduction, sale price, or even

freebies.

1. Cents-off deal2. Price-pack deals3. Bonus packs4. Banded packs

Freebies can be a killer if the company doesn’t adequately predict consumer response!


What are the tools of consumer promotions?

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The Billings “Trailhead” campaign used weekly drawings with the winners receiving caps, as well as dinner and two nights at the Crowne Plaza Hotel for the grand prize winner.

Refunds and Rebates Marketers offer to return a certain amount of money to the consumer who purchases the product, or a coupon to encourage repeat use.

SamplingAllowing the consumer to try the product or service. Examples: in-store, mailed, dentist office, or newspaper.



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PremiumsA premium is a tangible reward for a particular act. It works by adding value to the product.

There are four variations:1. Store premiums: given at retail site2. In-pack premiums: inserted in the package3. On-pack premiums: attached to package4. Container premiums: the package is the premium

A self-liquidator premium requires that a payment be mailed with proof of purchase.

◦



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CouponsProvide a discount on the price of the product.

◦Retailer: redeemable only at their outlet.

◦Manufacturer: redeemable at any outlet carrying the product.



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Cellfire is a company that sends digital coupons via text messages and loyalty cards.

Contests and sweepstakes◦ Create excitement by promising “something for

nothing” and offering impressive prizes.◦ Contests are based on skill or ability.◦ Sweepstakes are based on luck.

Specialties◦ Presents the brand’s name on something that is given

away as a reminder.◦ Examples: key chains, pens, calendars, tote bags,

coffee mugs.



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Promotional media These can include:

◦ Print◦ Broadcast ◦ Online

Frontier Airlines “favorite animal” contest used the Internet to increase online purchase of flights.



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Promotional campaigns Special promotions are usually approached as a

campaign because they involve a variety of media and reach many stakeholders.

For an example, check out the “The Inside Story: The Intersection of the Movie and Promotion Industries” in this chapter.



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Awareness◦ The first step in consumer decision making.

Trial ◦ Get the right people involved with the product through

sampling, price deals, coupons, and rebates.

Maintain or increase market share◦ The idea is to convince people to switch.◦ Price deals work with low-loyalty products.◦ Characters associate the brand with the character.

Brand reminder◦ Remind customers of positive experience with ad copy,

specialty items, and thank-you gifts.


How are consumer promotions used?

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Trade Promotions


Trade refers to all involved in the channel of distribution including buyers, brokers, distributors, wholesalers, and others.

Usually directed at distribution channel members. This is known as channel marketing.


Trade promotions

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These kits were sent by Kuni Automotive to the smart car company to win dealerships in three cities.

Retail (dealer) kits◦ Materials that support retailer’s selling efforts or help

representatives make sales calls.◦ They could contain product spec sheets, or ad slicks.

Trade incentives and deals◦ A financial reward for purchasing a certain amount of

product or supporting a promotion.◦ Includes special displays, extra purchases, superior store

locations, more local promotion.◦ Retailers get special discounts, free goods, gifts, cash, and

advertising allowances.


What are the types of trade promotion?

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Contests◦ Advertisers can develop contests and sweepstakes to

motivate resellers.◦ Contests are far more common than sweepstakes because

they can be more closely tied to product.

Point-of-purchase promotions◦ Manufacturers design and distribute displays to retailers

to draw attention to their products.◦ Examples: racks, display cartons, banners, signs, moving

parts, lights, action.



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Trade Shows and ExhibitsCompanies in the same industry gather to present and sell merchandise and demonstrate products.



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Nintendo launched its Wii game with demonstrations at entertainment and video game trade shows.

The two primary roles for a trade promotion:1. Stimulate in-store merchandising or other trade

support.2. Create excitement among those responsible for selling

the product.

Trade promotions are also used to:◦ Manipulate wholesalers’ and retailers’ inventory levels.◦ Expand product distribution to new geographic areas or

classes of trade.


How is trade promotion used?

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Demand: push-and-pull strategies Pull strategies: creating or increasing customer

demand so product is “pulled” through the channel.

Push strategies: give channel members reasons to carry products or give them better shelf space so product is “pushed” through the channel.

Common push strategy incentives: Bonuses Dealer loaderBuying allowances Advertising allowancesCo-op advertising Display allowance



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Attention◦ PoP displays get attention and stimulate impulse purchases.◦ PoPs can also complement other promotional campaigns.

Motivation◦ Contests, trade deals, and other incentives motivate

trade/channel members to make sales.

Information◦ Trade show displays give information about products, allow

trade buyers to gather and compare products.



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Multiplatform Promotions


Some promotions cross over to other areas of marketing and blur the lines between promotion, advertising, and public relations.

◦ Sponsorships ◦ Event marketing◦ Loyalty programs◦ Co-marketing or partnership promotions

Let’s take a look at each one…


Multiplatform promotions

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Sponsorships Occur when companies support a sporting event, concert, or charity, either financially or by donating supplies and services.

Companies undertake sponsorships to build brand associations and increase the perceived value of the brand in the consumer’s mind.

As a class: Read and discuss “A Matter of Practice: Advertising

Through Sports” to learn about the growth of sports-related promotions.


Sponsorships and event marketing

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Event marketing Here, marketers link a brand to an event.

Examples: ◦ The Jose Cuervo beach volleyball tournament◦ Wii Fit Plus Experience Game with Target Stores◦ The Super Bowl, the granddaddy of all events



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Ambush marketing refers to promotional stunts at events by companies that are not official sponsors.

Other promotional support might include: ◦ Blimps◦ Balloons◦ Inflatables◦ Skywriting airplanes



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To help promote the opening of the movie Spider-Man, inflatables like this one were placed along buildings in major cities.



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Also called continuity or frequency programs.

Designed to increase customer retention.

Frequent flyer programs, TGI Friday’s “Frequent Fridays”

These programs also capture information to use for more targeted promotions and advertising.


Loyalty progams

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Comarketing involves manufacturers developing marketing communication programs with their main retail accounts, instead of for them.

Cobranding occurs when two companies come together to offer a product.

For example, American Airlines put its logo on a Citibank Visa card.


Partnership progams

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With licensing, one company gives another company the right to use its legally protected trademarks and logos on products and in advertising or promotion.

Tie-ins and cross-promotions occur when two companies are displayed, advertised, or promoted together to multiply impact.

As a class: Recall Billings, Montana/Pepsi “Trailhead” rebranding campaign

from this chapter. What were its key elements?


Partnership progams

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Promotion Strategy


To introduce a new product.

To create brand awareness.

To build a brand over time.◦ Create affinity between brands and buyers.◦ Create brand involvement through positive

associations.


Promotion objectives

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Promotion integration

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Advertising• Creates a brand image

over time.• Relies on emotional

appeals.• Adds tangible value to

product or service through image.

• Contributes moderately to short-term profitability.

Promotion• Creates immediate action.• Added value strategies rely

on rational appeals; impulse appeals use emotion.

• Adds tangible value to product or service.

• Contributes greatly to short-term profitability.

Effectiveness is measured by sales volume, response rates, and redemption (coupons, refunds, rebates) rates.

Payout planning seeks to produce promotions that increase sales and profits.

Promotions can deliver sales but they must be well planned and executed in order to enhance the brand’s reputation.


Promotion effectiveness

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In Chapter 18, we will: Wrap up our discussion of IMC. Introduce various specialized areas of

marketing communication. Reinforce the idea that all the tools presented

thus far must work together to create a consistent and coherent brand image.


Where We’re Headed Next

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“Consumers Vote Frontier the Winner” Frontier’s “Denver’s Favorite Animal” campaign

proved to be a winner.

Fans engaged in the democratic process in a mock election, posting more than 4,000 entries.

Web traffic was up more than 50 percent over the same period in the previous year.


It’s a Wrap

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“Consumers Vote Frontier the Winner”

Key lessons: To reach the marketing and campaign objectives,

advertisers must be willing to take risks.

Sales promotions must be consistent with the brand’s personality, and deliver on brand promise.

As a class: What others can you think of?


It’s a Wrap

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Part 5 Principles: IMC and Total Communication Copyright © 2012 Pearson Education, Inc. publishing...

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