Lecture Advertising and promotion – Chapter 16: Sales promotion

Chapter 16
Sales promotion

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Learning objectives
1. To understand the role of sales promotion in a
company’s integrated marketing communication
program and to examine why it is increasingly
important.
2. To examine the various objectives of sales
promotion programs.
3. To examine the types of consumer- and tradeoriented sales promotion tools and the factors to
consider in using them.
4. To consider potential problems and abuse by
companies in their use of sales promotion.

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Sales
promotion abuse

Scope and role

Objectives
Trade-oriented
sales promotion

Sales
promotion

Growth of
sales promotion

Techniques
Consumer-oriented
sales promotion

Objectives

Techniques

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Australia’s national dish

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Sales promotion
A
A direct
direct inducement
inducement that
that offers
offers an
an extra
extra value
value or
or
incentive
incentive for
for the
the product
product to
to the
the sales
sales force,
force,
distributors,
distributors, or
or the
the ultimate
ultimate consumer
consumer with
with the

the
primary
primary objective
objective of
of creating
creating an
an immediate
immediate sale.
sale.

An
An extra
extra
incentive
incentive to
to buy
buy

A
A tool
tool to
to
speed
speed up
up sales
sales

Targeted
Targeted to
to

different
different parties
parties

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Scope of sales promotion
Sales
Sales promotion
promotion can
can be
be targeted
targeted at…
at…

Retailers
Retailers

Trade-oriented
Trade-oriented sales
sales
promotion
promotion

Consumers
Consumers

Consumer-oriented
Consumer-oriented
sales
sales promotion
promotion

Copyright 2012 McGraw-Hill Australia Pty Ltd
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Sales promotion vehicles
Consumer-oriented
Samples
Samples
Coupons
Coupons
Premiums
Premiums

Trade-oriented
Contests,
Contests, dealer
dealer incentives
incentives
Trade
Trade allowances
allowances

Contests/sweepstakes
Contests/sweepstakes

Point-of-purchase
Point-of-purchase displays
displays

Refunds/rebates
Refunds/rebates

Training
Training programs
programs

Bonus packs
Bonus packs

Trade
Trade shows
shows

Price-off
Price-off deals
deals

Cooperative
Cooperative advertising
advertising

Loyalty
Loyalty programs
programs
Event
Event marketing
marketing
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Sony lives an innovative sales
promotion

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Sales promotion for a tourist
destination

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Sales
promotion abuse

Scope and role

Objectives
Trade-oriented
sales promotion

Sales
promotion

Growth of
sales promotion

Techniques
Consumer-oriented
sales promotion

Objectives

Techniques

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Sales promotion in Australia

More
More than
than $6
$6 billion
billion is
is spent
spent on
on promotions
promotions
marketing
marketing annually.
annually.

81%
81% of
of Australian
Australian consumers
consumers
have
have purchased
purchased aa product
product as
as aa
direct
direct result
result of
of aa promotion.
promotion.

Growth

Growth in
in sales
sales promotion
promotion is
is expected
expected as
as marketers
marketers
become
become more
more adept
adept at
at using
using viral
viral marketing,
marketing, email
email and
and
other
other opt-in
opt-in communications
communications technologies.
technologies.

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Sales promotion within IMC
• Insert Figure 16.2
• Development of promotional strategy

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Growth of sales promotion
Changing
Changing economic
economic conditions
conditions

Some
Some
reasons
reasons
for
for
growth
growth

Growing
Growing power
power of
of retailers
retailers

Declining
Declining brand
brand loyalty
loyalty
Increased
Increased promotional
promotional sensitivity
sensitivity
Brand
Brand proliferation
proliferation
Fragmentation
Fragmentation of
of consumer
consumer markets
markets
Short-term
Short-term focus
focus of
of marketers
marketers
Increased
Increased accountability
accountability
Need
Need to
to penetrate
penetrate the
the clutter
clutter

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Sales promotion—NZ Style

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The shifting role of the sales
promotion agency

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16-15


Sales
promotion abuse

Scope and role

Objectives

Trade-oriented
sales promotion

Sales
promotion

Growth of
sales promotion

Techniques
Consumer-oriented
sales promotion

Objectives

Techniques

Copyright 2012 McGraw-Hill Australia Pty Ltd
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16-16


Consumer-oriented sales
promotion
Identify
Identify target
target audiences
audiences
Determine

Determine sales
sales promotion
promotion objectives
objectives
Obtain
Obtain trial
trial and
and repurchase
repurchase
Increase
Increase consumption
consumption  
Target
Target aa specific
specific market
market segment
segment
Defend
Defend current
current customers
customers  
Enhance
Enhance IMC
IMC and
and build
build brand
brand equity
equity

Set

Set measurable
measurable goals
goals
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Masterstrokes with MasterChef

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Schick uses sales promotion to
encourage trial

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A new take on designer wear

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Packaged-goods manufacturers’
consumer promotions

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Sampling
Sampling
Sampling works
works best
best
when
when

The
The products
products are
are
of
of relatively
relatively low
low
unit

unit value,
value, so
so
samples
samples do
do not
not
cost
cost much
much

The
The products
products are
are
divisible
divisible and
and can
can
be
be broken
broken into
into
small
small sizes
sizes that
that
can
can reflect
reflect the

the
product’s
product’s features
features
and
and benefits
benefits

Copyright 2012 McGraw-Hill Australia Pty Ltd
PowerPoint Slides t/a Advertising and Promotion 2e by Belch, Belch, Kerr & Powell

The
The purchase
purchase
cycle
cycle is
is relatively
relatively
short
short so
so the
the
consumer
consumer can
can
purchase
purchase in
in aa
relatively
relatively short

short
time
time period
period

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Sampling distribution
Door-to-door
Door-to-door

Methods
Methods

Direct
Direct mail
mail
In-store
In-store sampling
sampling
On-package
On-package sampling
sampling
Event
Event sampling
sampling
With
With magazine/newspaper 
magazine/newspaper 

Internet
Internet
Other
Other

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Bundle of baby products

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Coupons
The
oldest and
most widely used
sales promotion tool

Coupons
Coupons
Used by
virtually
all packaged goods

manufacturers

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