Chapter 14 Consumer Sales Promotion & Packaging Key Points:  How do sales promotions add value to a brand offering?  What are consumer sales promotions designed to accomplish, and what are their strengths and limitations?  What role does packaging play when consumers make brand decisions?

Sales Promotion  Offers a tangible added-value  Designed to accelerate response  Primary goal motivate consumer behaviour — NOW

Sales Promotion The use of incentives to motivate end users to purchase a brand and thus pressure retailers to stock that brand Used by marketers as part of a pull strategy The use of incentives to motivate end users to purchase a brand and thus pressure retailers to stock that brand Used by marketers as part of a pull strategy Consumer Promotion  Motivate end users to purchase a brand  Pressure retailers to stock that brand pull strategy  Motivate end users to purchase a brand  Pressure retailers to stock that brand pull strategy  Motivate buying and reselling of products push strategy  Motivate buying and reselling of products push strategy Trade Promotion

Sales Promotion Extend the Use of a Brand Counter Competitive Offers Build Customer Databases Increase Trial and Repurchase Increase Frequency And/or Quantity of Purchases Cross-sell Increase Level of Customer Retention Reinforce Brand Image/Strengthen Brand Relationships Extend the Use of a Brand Cross-sell Increase Level of Customer Retention Build Customer Databases Counter Competitive Offers Increase Frequency And/or Quantity of Purchases Increase Trial and Repurchase Objectives

Sales Promotion Tools Premiums Specialities Coupons Price Reductions Rebates Sampling Sweepstakes & Contests

Chapter 15 Channel Marketing Key Points:  What is trade promotion and how does it fit into channel marketing?  How do trade promotion’s strategies and practices operate?  What is co-marketing and why is it an “integrating” practice?

Evolution Marketing to the Trade Old Thinking: Discounts and premiums offered to retailers in exchange for their promotional support New Thinking: Channel Marketing as an integrated process using personal selling, trade promotions, and co-marketing programs to build relationships with retailers and other channel members

Channel Marketing Importance Gateway The Customer is the Gateway to the Consumer. Customer = Distribution! Good marketing programs cannot overcome poor distribution!

Brand Equity Trade vs. consumer spend The trend is toward more trade support of products at the expense of consumer promotion Percent of Marketing Budget Consumer promotions2415 Trade promotions5361

Objectives Get shelf space/increase distribution Balance demand Manage inventory levels Respond to competitive programs Support channel members

Customer Marketing GOAL: To grow your sales and retail listings with key customers. ‘ STRATEGY: COMMUNICATE how your brand / corporate strategies support customer strategies and requirements e.g. customers’ category growth & retail pricing strategies, customer “events” e.g. Anniversary event, branded vs. private label offerings, seasonality, etc ‘ TACTICS: Category Management perspective AC Nielsen analysis Category insights vs. brand myopia In-house category support Consumer research insights Plan-o-grams / store setups

Trade Promotion GOAL: To grow your sales with key customers. ‘ STRATEGY: Motivate Trade’s support by utilizing “push” tactics for short-term objectives (e.g. sales, inventory, competitive). ‘ TACTICS: Volume discounts Allowances (e.g combos, special events, display space, forced distribution) Listing fees Trade Magazines POP & in-store consumer promotions Dealer loaders (“display activators”) Dealer and Sales Rep contests / SPIFFs Price Promotion (e.g feature pricing, ad activity)

Kraft/Crayola POP

Co-Marketing  Customized manufacturer-retailer joint effort designed to have a better price/image balance in local retail advertising of manufacturers’ brands  Increasingly important for brands Competition for shelf space is intense Need to accommodate the growing power of retailers 3 chains control 50% of all Canadian grocery sales

Pt. Chg ± $ % Chg +6%+8%+8%0%+3%+6%+24%-2%+12%+11% Source: Homescan Grocery Watch; 52 Weeks to December , National Corporate Dollar Share of All Outlet Channels -- National (+6%) Top 3 grocery retailers Grocery Composite 50% of sales