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Sales Promotion, Point- of-Purchase Advertising, and Support Media 15.

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Presentation on theme: "Sales Promotion, Point- of-Purchase Advertising, and Support Media 15."— Presentation transcript:

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2 Sales Promotion, Point- of-Purchase Advertising, and Support Media 15

3 Coordination Challenge DirectoriesDirectories EventsEvents TransitTransit BillboardsBillboards TelevisionTelevision BrandedEntertainmentBrandedEntertainment MagazinesMagazines InternetInternet RadioRadio

4 Traditional Support Media Purpose: To reinforce or extend a message being delivered through other media –Signs, billboards –Transit –Aerial –Specialty –Directory

5 Outdoor Signage and Billboards Advantages –Wide local exposure –Captivating –Around-the-clock exposure –Address an immediate need or desire Disadvantages –Message limits –Location affects impact –Relatively expensive –Criticized by environmental groups

6 Transit Ads –Urban environments –Demographic segmentation –Timely to purchase –Build brand awareness

7 Aerial Ads –Blimps increasingly common –Common at sporting events –Networks are in control

8 What is Vehicle Wrapping? Vehicle wrapping is a form of outdoor advertising Digitally-generated graphics are printed on vinyl, and subsequently “wrapped” onto vehicles Has become an international advertising medium

9 Outdoor Advertising - An Overview U.S. advertisers spent $4.8 billion on outdoor media in 1999 Outdoor ads represent 2% of all advertising media Growing approximately 10% per year Growth is faster than: –Total Advertising Expenditures –Gross Domestic Product (GDP)

10 The Power of the Personal Vehicle Spends two hours per day in a car Averages 48 miles per day on the weekends Makes four or five trips each day 125 million Americans commute to work daily Daily trips have increased by 110% since 1970 Total number of cars on the road is up over 174% Motorists travel 3.4 trillion miles each year The Average Person: Source: Federal Highway Administration Outdoor Advertising Association of America (OAAA)

11 Wrapping for the Advertiser Advertisers approach trucking companies, dealerships, etc. to “use” their vehicle(s) Costs from $500 to $2500 to wrap an automobile The use of vinyl technology has made the medium more cost effective Aids in helping build awareness or maintain brand image

12 Continued... Global Positioning System (GPS ) –Satellite-based tracking system –Installed by plugging device into cigarette lighter –Provides 24-hr., three dimensional position, velocity and time information –Updates data every four minutes –Is key in determining OTS (opportunity to see)

13 Wrapping for the Consumer Companies such as Autowraps, Media Vehicles and Ads on Wheels are designed to accommodate people who would like to have their vehicle wrapped

14 Continued... Three Types of Vehicle Wrapping Full Wrap –Covers entire exterior, including windows –Driver is paid $450 max per month Decal Graphic –Requires only 50%exterior coverage, usually a large graphic or text image –Driver is paid $250 max per month Window Wrap –Covers two rear windows and back windshield –Driver is paid $150 max per month

15 Maintenance Takes 8 hrs for full wrap Takes 4 hrs for decal and/or window wrap Installation takes place within 30 mile radius of driver Driver is asked to provide proof of insurance, a DMV report, and sign agreements Required to drive approx hours per month Meet with field monitor for a monthly inspection, and to switch out GPS system

16 Businesses Advantages Businesses - Advantages Can provide exposure in urban areas and on the interstate Allows for outdoor advertising where no billboard space exists Have the ability to entertain, educate and inform Geographic and demographic flexibility This form of advertising is less intrusive and annoying than other forms

17 Businesses Disadvantages Businesses - Disadvantages Must maintain message control –Social Responsibility –I.e. “Make 7…Up Yours” Cannot be used as the sole promotional tool –Component of an overall communications mix

18 Consumer Advantages Consumer - Advantages Generate extra income Low-end and high-end cars are used Some companies are willing to donate their wrapped vehicles if motorists will drive them Great for those with no mode of transportation Some companies sell their wrapped vehicles at special discount rates

19 Consumer - Disadvantages Too eye-catching for the open road “Sophisticated Graffiti” Could spark an onslaught of spray painting on buildings, cars and trucks Difficult to break contracts

20 Airport Advertising: Dioramas The following airport advertising info is from Yong Jun Sung & Pumsoon Park - the first and most commonly utilized - located throughout the terminals in arrivals, departures, ticketing and baggage claim areas - Wall, shelter, and king-size dioramas

21 Wraps - The most widely used form of U.S. - Applied to flat surfaces (walls, windows, and floors) - Flexible in size and shape - For short or long term campaign

22 Cylinder Showcases - Highly visible units - Display products and services - Secure setting for products such as perfume, jewelry, fashions, and ceramics

23 SkyScreens (Plasma) - Provide digital advertising and information - At high-traffic passenger cluster areas - Catch the eyes of people

24 Baggage Cart Sponsorships - Deliver total audience coverage - Message frequency

25 Others Bus shelter Leaflet dispensers Kiosks

26 Message Effectiveness High recall rates for airport advertising Traveler arrive at airport 57 minutes Prior to departure On average Passengers spend 93 minutes at the airport

27 How We Measure? 1. Overall airport traffic Ex) World airport ranking by total passengers 1999 Atlanta – 78,092,940 (Rank #1) JFK, NY – 31,700,604 (Rank #20) Orlando – total passengers 29,203,755 (Rank #24) 2. The number of brochures or leaflets taken from displays

28 Rate examples JFK International Airport (NY) Orlando International Airport Annual Passenger Monthly Passenger 31, ,203,755 2,641,717 2,433,644 Popular Vehicles Diorama $ 4,000 $ 3,300 Spectacular $ 12,000 $ 9,500 Exhibition Area $ 24,000 $ 8,000 Interactive Courtesy Phone Center $ 2,000 $ 1,500 SkyScreen $ 35,000 $ 25,000 JFK Airport (NY) Orlando Airport 43” x 62” 7’ x 11’ 16” x 10” 6’ x 4’ Size * per month & unit

29 Directory Advertising: CD-ROM and Web-based Directories Disadvantages –Too many directories –Long lead times –Limited creativity Advantages –High acceptance –High availability –Final link to purchase

30 Power Struggles and Sales Promotion Sales promotion plays a key strategic role in the channel of distribution –Big name brands must be supported with sales promotion and POP to get the support of retailers through self space allocation. –The top 10 retailers control 43% of all packaged goods sales so they can dictate which brands get how much shelf space. –Brand marketers spend $30 billion a year on sales promotion and POP to gain favored retailer treatment and to provide incentives to household consumers and business buyers.

31 Sales Promotion Using incentives to create a perception of greater brand value –Consumer Market Induce household consumers to purchase a firm’s brand –Trade-Market Motivate distributors, wholesalers, and retailers to stock and feature a brand –Business Buyer Cultivate buyers in large corporations who make purchase decisions

32 Sales Promotion Examples Coupons Price-off deals Premiums Contests Sampling Sweepstakes Brand placements Incentives Loyalty programs Trade shows AllowancesGift Cards

33 Sales Promotion vs. Advertising Short term demand vs. long term demand Encourage brand switching vs. brand loyalty Induce trial use vs. encourage repeat purchase Promote price vs. promote image Immediate results vs. long term effects Measurable results vs. difficult to measure

34 Importance of Sales Promotion $100 plus billion industry Growth rate: 4-8 percent Reasons for growth: –Demand for accountability –Short-term orientation –Consumer response to promotions –Proliferation of brands –Increased power of retailers –Media clutter

35 Objectives for Consumer-Market Sales Promotion 1. Stimulate trial purchase 2. Stimulate repeat purchases 3. Stimulate larger purchases 4. Introduce a new brand 5. Combat or disrupt competitors 6. Contribute to IMC

36 Consumer-Market Sales Promotion Techniques 1.Coupons 2.Price-off deals 3.Premiums 4.Contests/sweeps 5.Samples and trials 6.Phone gift cards 7.Brand placements 8.Rebates 9.Frequency programs 10.Event sponsorship

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38 Coupons Entitles a buyer to a price reduction for a product or service –Advantages Give a discount to price sensitive consumer while selling product at full price to others Induce brand switching Timing and distribution can be controlled Stimulates repeat purchases Gets regular users to trade up within a brand array

39 Coupons (cont’d) Disadvantages –Time of redemption cannot be controlled –No way to prevent current customers from redeeming coupons –Coupon programs require costly administration –Fraud is a serious, chronic problem

40 Price-Off Deals Offering consumers a reduced price at point of purchase through specially marked packages Advantages –Is controllable by manufacturer. –Affects positive price comparisons. –Increases consumers’ belief in the value of a known brand. Disadvantage –Retailers believe it creates inventory and pricing problems.

41 Premiums and Advertising Specialties Premiums –Free or reduced price for an item with the purchase of another item. Free premiums provide item at no cost. Self-liquidating premiums require consumers to pay most of the cost of the item Advertising specialties: –A message placed on a free, useful item

42 Contests and Sweepstakes Contests: consumers compete for prizes based on skill or ability. Sweepstakes: winners picked by chance Both create excitement and interest –But… Legal and regulatory requirements are complex. Consumers may focus on the game rather than the brand. Difficult to get an IBP message across in a game.

43 Nordstrom Launches 'Twilight' Line, Gives Away Tickets to 'New Moon' Premiere

44 Samples and Trial Offers Sampling –Giving a consumer an opportunity to use a brand on a trial basis with little or no risk Types of sampling –In-store– Newspaper –Door-to-door– On-package –Mail– Mobile Trial offers –Used for more expensive items –Try product for a fixed time –Trader Joes Example

45 Gift Cards Manufacturers offer either for free or for purchase debit cards. –With phone time –Or with preset spending limits Examples –Offers from Sephora, and The Gap.

46 Rebates Money back offer requiring the buyer to mail a request for money back from the manufacturer. Often tied to multiple purchases. Many consumers fail to bother sending the request. Canon example

47 Frequency Programs Also known as “continuity programs” –Offer customers discounts or free products for repeat patronage –Common in the airline, travel, and restaurant businesses

48 Objectives for Promotions in the Trade Market Objectives: Use a “push” strategy –Push a product into the distribution channel towards the consumer Obtain initial distribution Increase order size Encourage cooperation with consumer market sales promotions Increase store traffic

49 Trade-Market Sales Promotion Techniques Incentives: Push money Allowances: Merchandise allowances, slotting fees, bill-back allowances, off- invoice allowances Sales Training Programs Cooperative (Co-Op) Advertising

50 Business Market Sales Promotion Techniques Trade Shows Business gifts Premiums and advertising specialties Trial offers Frequency programs

51 Rewind Video Rewind Video Rewind Video Rewind Video  Click Bar To Start Video  Next Slide Next Slide Next Slide Next Slide Trial offers are very effective in the business market. Why?

52 Sales Promotion, the Internet, and New Media Sampling removes risk associated with consumer trial. Internet firms use incentives to make Web sites “sticky.” Internet is used to implement sales promotions and distribute coupons.

53 Risks of Sales Promotion Creates a price orientation Borrows from future sales Alienates consumers Time and expense Legal considerations

54 Point-of-Purchase (P-O-P) Advertising Materials used in the retail setting to attract shoppers’ attention to a brand, to convey primary product benefits, or highlight pricing information. Objectives for P-O-P Advertising –Draw consumers’ attention to a brand in the retail setting. –Maintain purchase loyalty among brand loyal users. –Stimulate increased or varied usage of the brand. –Stimulate trial use by users of competitive brands.

55 P-O-P Advertising and the Trade and Business Markets Product displays and information sheets encourage retailers to support one distributor or manufacturer’s brand over another. –P-O-P promotions can help win precious shelf space and exposure in a retail setting. –A P-O-P display is designed to draw attention to a brand, increase turnover, and possibly distribute coupons or sweepstakes entry forms. –To combat losing business to online shopping, retailers are trying to enliven the retail environment, and P-O-P displays are one strategy.

56 Coordination Challenge Message coordination Media coordination Research conclusions: –Short-term effects can be dramatic. –Short-term effects are often not profitable. –Rare for long-term effects to occur. –Most power effects result from advertising and sales promotion being used together.


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