2. Consumer and Trade Sales Promotion
Chapter 18
Consumer and Trade Sales Promotion
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

3. After studying this chapter you should be able to:
Explain the role and significance of sales promotion in the marketing communications mix.
Understand why sales promotion expenditures account for a significant portion of many firms’ marketing communications budgets.
Discuss the objectives and techniques of consumer sales promotion.

4. After studying this chapter you should be able to:
Discuss the objectives and techniques of trade sales promotion.
Explain the limitations of sales promotion.
Realize how deceptive and fraudulent sales promotion victimizes both consumers and marketers.

5. The Role of Sales Promotion
Consists of media and non-media marketing communications employed for a predetermined, limited time to stimulate trial, increase consumer demand, or improve product availability.
Consumer Sales Promotion:
Directed at Consumers
Trade Sales Promotion:
Directed at Resellers

6. The Significance of Sales Promotion
Sales Promotion Expenditures
Consumer Factors
Impact of Technology
Increased Retail Power

7. The 10 Commandments of Creative Sales Promotion
Set specific objectives
Know how basic promotion techniques work
Use simple, attention-getting copy
Use contemporary, easy-to-track graphics
Clearly communicate the concept
Reinforce the brand’s advertising message.
Support the brand’s positioning and image.
Coordinate promotional efforts with other marketing plans.
Know the media you work with.
Involve the trade.

8. Consumer Sales Promotion
Objectives of Consumer Sales Promotion:
Stimulate trial
Increase consumer inventory and consumption
Encourage repurchase
Neutralize competitors
Increase sales of complementary products
Stimulate impulse purchasing
Allow flexible pricing

9. Consumer Sales Promotion Techniques
Price Deals
Coupons
Rebates
Cross-Promotions
Contests, Sweepstakes, Games
Premiums
Sampling
Advertising Specialties

10. Objectives of Trade Sales Promotion:
Gain/maintain distribution
Influence resellers to promote product
Influence resellers to offer price discount
Increase reseller inventory
Defend against competitors
Avoid reduction of normal prices

11. Trade Sales Promotion Techniques
Trade Allowances
Dealer Loaders
Trade Contests
Point-of-Purchase Displays
Trade Shows
Training Programs
Push Money

12. Limitations of Sales Promotion
It typically cannot reverse a genuine declining sales trend.
Marketers cannot reasonable expect sales promotion to convert refection of an inferior product into acceptance.
Sales promotion may even weaken the brand image.
Sales promotion has also been blamed for encouraging competitive retaliation.

13. Limitations of Sales Promotion
Short-term volume gain at the sacrifice of profits.
Forward Buying:
People buy more than they need at the deal price.
Pay-for-Performance Trade Promotions:
Retailers are rewarded for making sales to consumers rather than making purchases from manufacturers.

14. Ethical and Legal Issues in Sales Promotion
Deceptive Sales Promotion
Fraud:
The Fake Storefront
Stuffing the Ballot Box
Playing the Middleman
The Redemption Scam

15. Ethical and Legal Issues in Sales Promotion
Diverting (or Arbitraging):
Secretly purchasing a product where it is less expensive, usually as a result of a trade promotion, and reselling in areas where prices are higher.

16. Global Concerns
The Global Perspective requires marketers to make an extra effort to become familiar with local laws and customs.