Visit Florida IMC Topic ISales Promotions

Peter HayashidaLynn Maikke

Marketing 642Fall 2003

Outline

Background

Core Issues

Findings Recommendations

Critical Factors for Success

Impact on Competition, Market and VF

Background What is Sales Promotion?

Tools that stimulate increased frequency or quantity of purchase of a product or service among end-users and intermediates (the trade)

Generally focused on short-term results Advertising presents the case, sales promotions

provide immediate incentive to buy Can be used for:

Acquisition: e.g., free samples Retention/increased usage: e.g., frequent flyer programs

Prevalence Sales promotions have become increasingly

important within the marketing mix 10 years ago, 60:40 mix of advertising to sales

promotions Today, 65 – 70% of budget is promotions

Why? More accepted as an effective sales tool More product managers skilled in their use Greater pressure to increase current sales.

Types of Promotions Categorized by target audience:

Consumer promotions (free samples, coupons, discounts, prizes, loyalty programs, tie-ins, and point-of-purchase displays)

Trade promotions emphasize advertising, discounts, and display allowances

Business and sales force promotions involve trade shows and conventions, specialty advertising, and contests for sales associates

Types of Promotions Categorized by type:

Added-value promotions Give the consumer something in addition to

the product

Price Promotions Discounts, coupons, etc. PROHIBITED IN VISIT FLORIDA

VISIT FLORIDA Promotions Department

In-house Works with local and international

partners: media, retail outlets, and others

Assembles tour packages that offer advertising exposure to partners

Caveat: need to coordinate promotional message and themes with advertising

Findings In the absence of price promotions,

must focus on added-value promotions

Because of strength of ability to assemble packages, sweepstakes, prizes and giveaways have the most potential

Research Researchers Ward and Hill (1991) proposed

factors that maximize return Differentiate games of chance from games of skill Differentiate games with immediate payoffs from

those with delayed gratification Findings support games of chance (e.g.,

sweepstakes) where the payoff occurs at some point in the future Especially appropriate with a “big ticket” item like

a vacation package

More Research Consumers decide to participate

based on both intrinsic and extrinsic factors Perception of odds of winning and value

of the prize(s) are critical to their decision

More research later…

Recommendations VISIT FLORIDA should implement a

sweepstakes program Prize is seven-day vacation package to

one of several destinations in Florida (includes airfare and car rental)

Winners selected at random Time cycle should be long – full duration

of the VISIT FLORIDA campaign

Recommendations Individuals enter each time they visit the state

for a weekend or longer Focus on leisure, not business traveler

Participants initially complete a mail-in entry form with survey questionnaire

Entrants will rank several FLA destinations Prizes allocated more closely to winners’

preferences Provides data regarding most popular destinations.

Recommendations Each time participants visit for a at

least a weekend, they will receive an additional chance to win Allowing multiple entries from actual

visitors matches rewards with desired behavior

Favors most relevant population: frequent visitors

Critical Success Factors

Design and implementation are key Extra care to not lead participants re:

Value of prizes Odds of winning

Be as clear as possible Emphasize the randomness of winner selection Extra caution for multiple prize packages Indirect relationship between time horizon and

consumer disappointment All players receive a nominal token of value

redeemable in Florida

Alternative Game Format

Different types of games attract different types of consumers Scratch off game

Game piece is also a coupon Allows for a high level of control with a limited

number of tickets and a single winner Emphasize the randomness with a “Better

Luck Next Time” message

Implications for Competitors, Markets, and

VF Generic nature of sun-destinations

The number of brands has increased Consumers more price-oriented

Advertising efficiency has declined Rising costs, media clutter, and legal restraints

Differentiate VF as a destination of diversity Emphasize art, culture, and other outdoor

activities Sales promotions should supplement advertising with a

consistent message and themes

Maximizing Results General objectives of sales promotion

Attract new users Reward loyal customers (retention) Increase the repurchase rate of occasional users Attract brand switchers

Most effective when the product is superior VISIT FLORIDA sales promotion objectives

Induce consumers to visit the state for the 1st time

Promote greater consumer awareness Adapt programs to different consumer segments

Converting brand switchers to loyal users depends on the consumers overall “experience”

Questions & Discussion