Lecture Advertising and promotion: An integrated marketing communications perspective (10/e): Chapter 16 - George E. Belch, Michael A. Belch

Chapter 16
Sales 
Promotion

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Sales Promotion
“A direct inducement that offers an extra value or 
“A direct inducement that offers an extra value or 
incentive for the product to the sales force, 
incentive for the product to the sales force, 
distributors, or the ultimate consumer with the 
distributors, or the ultimate consumer with the 
primary objective of creating an immediate sale.”
primary objective of creating an immediate sale.”

An extra 
An extra 
incentive to buy
incentive to buy

A tool to 
A tool to 
speed up sales
speed up sales
Targeted to 
Targeted to 
different parties
different parties

Types of Sales Promotion Activities

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Reasons for the Increase in Sales 
Promotion
Growing power of retailers and declining brand loyalty
Increased promotional sensitivity
Brand proliferation
Fragmentation of the consumer market
Short-term focus and increased accountability
Competition and clutter
Growth of digital marketing
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Consumer Franchise­Building versus 
Nonfranchise­Building Promotions
Consumer franchise-building

Nonfranchise-building (non-FB)

(CFB) promotions

promotions

• Communicate distinctive brand

• Accelerate the purchase decision

attributes and contribute to the

process and generate an immediate

development and reinforcement of

increase in sales

brand identity
• Build long-term brand preference
• Help achieve full-price purchases that
are not dependent on promotional

• Do not contribute to the building of
brand identity and image
• Merely borrow customers from other
brands

offers
• Capable of converting consumers to
loyal customers

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Sampling
Sampling Works
Best When

Products are of 
relatively low unit 
value, so samples 
don’t cost much

Products are divisible 
and can be broken 
into small sizes that 
reflect the products 
features and benefits

Purchase cycle is 
relatively short so 
the consumer can 
soon purchase 
again


Sampling Methods

Door-to-door sampling
Sampling through the mail
In-store sampling
On-package sampling
Event sampling
Sampling through magazines and newspapers
Sample request forms
Sampling through the internet and social media
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Advantages and Limitations of 
Couponing
Advantages
• Appeals to price-sensitive customers
• Does not require retailers’ cooperation
• Reduces consumer’s perceived risk
associated with trial of a new brand
• Encourages repeat purchase
• Helps coax users to trade up to more
expensive brands

Limitations
• Estimating how many consumers will
use a coupon and when is difficult
• Less effective for inducing initial
product trial in a short period

• Consumers already using the brand
cannot be prevented from using the
coupons
• Have low redemption rates and high
costs
• Could result in misredemptions

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Types of Premium
 Free premiums: Small gifts or merchandise:
 Included in the product package
 Sent to consumers who mail in a request along with 
a proof of purchase

 Self­liquidating premiums: Require the consumer 
to pay:
 Some or all of the cost of the premium
 Handling and mailing costs
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Contests and Sweepstakes

Sweepstakes

Promotion where winners are
determined purely by chance
Cannot require proof of purchase
as a condition for entry
Winners chosen by random selection from pool 
of entries or generation of a number to match 
those held by game entrants
Consumers compete for prizes or money on the 
basis of skills or ability

Contest

Winners determined by judging entries
or ascertaining which entry is closest
to predetermined criteria


Advantages & Limitations of Refunds 
and Rebates

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Advantages and Limitations of Bonus 
Packs 

Advantages
• Direct way to provide extra value
• Have a strong impact on the purchase decision at the time of
purchase
• Effective defensive maneuver against competitor’s promotion
• May result in larger purchase orders and favorable display space
in stores

Limitations

• Require additional shelf space without providing extra profit
margins for retailers
• Appeal primarily only to current users and promotion-sensitive
consumers
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Advantages and Limitations of Price­off 
Deals
Advantages
• Ensure discounts reach the consumers
• Present a readily apparent value to shoppers
• Encourage consumers to purchase larger
quantities

Limitations
• Can create pricing and inventory problems

• Appeal primarily to regular users and not new
users
• Must adhere to regulations set by the Federal
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Trade Commission
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Event Marketing versus Event 
sponsorship
Event marketing
• Company or brand is linked to

Event sponsorship
• Company develops

an event, or a themed activity

sponsorship relations with an

is developed to:

event and provides financial

• Create experiences for

support in return for:

consumers
• Promote a product or
service

• Right to display a brand
name, logo, or advertising
message
• Being identified as a
supporter of the event

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Figure 16.5 ­ Consumer­Oriented Sales Promotion 
Tools for Various Marketing Objectives

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Types of Trade Oriented Promotions
Contests and incentives
Types

Co­op Advertising

Trade allowances

POP displays

Buying

Sales training

Promotional

Trade shows

Slotting


Types of Cooperative Advertising
Horizontal cooperative advertising
• Sponsored by a group of retailers providing products or
services to the market

Ingredient-sponsored cooperative advertising
• Supported by raw materials manufacturers
• Establishes end products that include the company’s
materials and/or ingredients

Vertical cooperative advertising
• Manufacturer pays for a portion of the advertising a retailer
runs to promote the manufacturer’s product
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Figure 16.8 ­ The Sales Promotion Trap

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