1. Part 5 Principles: IMC and Total Communication
Chapter 17: Promotions
Part 5 Principles: IMC and Total Communication
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2. Questions to Explore
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?
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3. Why Sales Promotion?
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4. 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.
Sales promotion means increasing the value of its product or brand by offering an extra incentive to purchase it. It is designed to encourage action. Sales promotion is primarily designed to motivate people to act by offering incentives.
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5. Why sales promotion?
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.”
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6. Why is sales promotion growing?
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.
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.
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7. Why is sales promotion growing?
To see how sales promotion can generate positive ROI, go to:
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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8. Why is sales promotion growing?
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.
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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9. Why is sales promotion growing?
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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10. Sales promotion planning
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.
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.
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11. What are the primary categories of sales promotion?
Consumer
Trade
Sales Force
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12. Consumer Promotions
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13. What are the tools of consumer promotions?
Price Deals
Temporary price reduction, sale price, or even freebies.
Cents-off deal
Price-pack deals
Bonus packs
Banded packs
Freebies can be a killer if the company doesn’t adequately predict consumer response!
Price Deals include temporary price reductions, sale prices, or even freebies. However, freebies can be a killer if the company doesn’t adequately predict consumer response!
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14. What are the tools of consumer promotions?
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.
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15. What are the tools of consumer promotions?
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.
Sampling Allowing the consumer to try the product or service. Examples: in-store, mailed, dentist office, or newspaper.
Marketers offer to return a certain amount of money to the consumer who purchases the product, or a coupon to encourage repeat use. Sampling allows the consumer to try the product or service. Examples: in-store, mailed, dentist office, or newspaper.
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16. What are the tools of consumer promotions?
Premiums A premium is a tangible reward for a particular act. It works by adding value to the product.
There are four variations:
Store premiums: given at retail site
In-pack premiums: inserted in the package
On-pack premiums: attached to package
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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17. What are the tools of consumer promotions?
Coupons Provide a discount on the price of the product.
Retailer: redeemable only at their outlet.
Manufacturer: redeemable at any outlet carrying the product.
Cellfire is a company that sends digital coupons via text messages and loyalty cards.
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18. What are the tools of consumer promotions?
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.
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 present 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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19. What are the tools of consumer promotions?
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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20. What are the tools of consumer promotions?
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.
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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21. How are consumer promotions used?
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.
Awareness is the first step in consumer decision making. Trial gets the right people involved with the product through sampling, price deals, coupons, and rebates.
In maintaining 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 reminders remind customers of positive experience with ad copy, specialty items, and thank-you gifts.
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22. Trade Promotions
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23. 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.
These kits were sent by Kuni Automotive to the smart car company to win dealerships in three cities.
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.
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24. What are the types of trade promotion?
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.
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25. What are the types of trade promotion?
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.
Using 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.
With point-of-purchase promotions, manufacturers design and distribute displays to retailers to draw attention to their products. Examples include racks, display cartons, banners, signs, moving parts, lights, action.
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26. What are the types of trade promotion?
Trade Shows and Exhibits Companies in the same industry gather to present and sell merchandise and demonstrate products.
Nintendo launched its Wii game with demonstrations at entertainment and video game trade shows.
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27. How is trade promotion used?
The two primary roles for a trade promotion:
Stimulate in-store merchandising or other trade support.
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.
Trade promotion is used to stimulate in-store merchandising or other trade support. It also creates excitement among those responsible for selling the product.
Trade promotions are also used to manipulate wholesalers’ and retailers’ inventory levels, and to expand product distribution to new geographic areas or classes of trade.
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28. How is trade promotion used?
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 loader
Buying allowances Advertising allowances
Co-op advertising Display allowance
Pull strategies create or increase 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.
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29. How is trade promotion used?
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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30. Multiplatform Promotions
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31. 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…
Some promotions cross over to other areas of marketing and blur the lines between promotion, advertising, and public relations These include sponsorships, event marketing, loyalty programs, and co-marketing or partnership promotions.
Let’s take a look at each one……
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32. Sponsorships and event marketing
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.
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33. Sponsorships and 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
Using event marketing , marketers link a brand to an event.
Examples include:
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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34. Sponsorships and event marketing
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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35. Sponsorships and event marketing
To help promote the opening of the movie Spider-Man, inflatables like this one were placed along buildings in major cities.
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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36. Loyalty progams 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.
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37. Partnership progams
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.
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.
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38. Partnership progams
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?
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39. Promotion Strategy
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40. Promotion objectives 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 are to introduce a new product, to create brand awareness, and to build a brand over time. Promotion objectives also create affinity between brands and buyers, and create brand involvement through positive associations.
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41. Promotion integration
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.
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42. Promotion effectiveness
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.
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.
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43. Where We’re Headed Next
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.
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44. It’s a Wrap “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.
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.
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45. It’s a Wrap “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?
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?
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