Promotion – 1 Promotion Professor Carl Mela BA 460 Product Management Fuqua School of Business Brand Management System On Building A Brand Managing Across Brands

Promotion – 2 Agenda Event Marketing Sales Promotion

Promotion – 3 Event Marketing $3.7 BB business Many companies have a separate department for event marketing –Sporting Events –Music –Festivals –Causes –Arts –Self created events (Wall of Velcro)

Promotion – 4 Event Marketing Provides Marketers With: Link to segment or lifestyle (4WD and skiing) Increased awareness (Dutch Boy ‘In the Paint’ basketball) Brand associations (Champion plugs and NASCAR) Enhance corporate image (prestige)

Promotion – 5 Event Marketing Provides Marketers With: Signal of commitment to the community Entertain key clients (Iron Dukes) Create excitement for employees

Promotion – 6 Event Marketing Risks Cannot control events –Recent football arrests and affect on brand image –Ensure target audience is matched and images favorable Payoff hard to measure –DDB Needham 22 of 37 olympic sponsors created no connections in consumers minds.

Promotion – 7 Sales Promotion Trade –Allowances, discounts, etc. Consumer –Coupons, etc. Incentive, as opposed to reason to buy

Promotion – 8 Trade Promotions Used to obtain distribution and shelf facings / product placements. Used to create temporary price reductions to the consumer Used to control inventory levels (low or high) Talking point for sales force

Promotion – 9 Consumer Promotions Franchise building (samples/message) Non-franchise building (price cuts) Induce trial Induce switching Induce stockpiling Defend against competitive promotions

Promotion – 10 Critiques Short term orientation hurts brand Inventory and production volatility hurts brand

Promotion – 11 Blattberg et al. Learning from supermarket scanner data –Temporary price cuts substantially increase sales –Higher share brands’ deals work better –More deals lead to a smaller sales spike –Retailers pass through less than 100% –Display and feature have huge effect –Deals affect store traffic - effect is small –Promotions affect sales in complementary categories.

Promotion – 12 Blattberg et al. What we still do not know –Most of volume comes from switchers (short run) –Promotional elasticities exceed price elasticities –There is a post promotion dip –How much of deal effect is incremental –There is a negative long term effect of promotion New study I will be doing w/IRI data

Promotion – 13 Summary Event Marketing –Ensure event is for proper target audience and that associations are favorable Sales Promotions –Incentive, not reason, to purchase –Excessive use can damage your brands