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Chapter 16 - Chapter 16 T H E SCOPE AND ROLE OF SALES PRO...

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Chapter 16 THE SCOPE AND ROLE OF SALES PROMOTION -Sales Promotion- a direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating an immediate sale. (extra incentive, acceleration tool, targeted to different parties) 1. Consumer-oriented sales promotion- activities including sampling, couponing, premiums, contests and sweepstakes, refunds and rebates, bonus packs, price-offs, frequency programs, and event marketing, and are designed to induce them to purchase the marketer’s brand. 2. Trade-oriented sales promotion- Includes dealer contests and incentives, trade allowances, point-of-purchase displays, sales training programs, trade shows, cooperative advertising, and other programs designed to motivate distributors and retailers to carry a product and make an extra effort to push it to their customers. THE GROWTH OF SALES PROMOTION REASONS FOR THE INCREASE IN SALES PROMOTION o The Growing Power of Retailers o Declining Brand Loyalty o Increased Promotional Sensitivity o Brand Proliferation o Fragmentation of the Consumers Market
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o Short-Term Focus o Increased Accountability o Competition -account-specific marketing (co-marketing)- manufacturer collaborates with an individual retailer to create a customized promotion that accomplishes mutual objectives. CONCERNS ABOUT THE INCREASED ROLE OF SALES PROMOTION CONSUMER FRANCHISE-BUILDING VERSUS NONFRANCHISE- BUILDING PROMOTIONS -consumer franchise-building (CFB) promotions- Sales promotion activities that communicate distinctive brand attributes and contribute to the development and reinforcement of brand identity. -Nonfranchise-building (non-FB) promotions- Designed to accelerate the purchase decision process and generate an immediate increase in its sales. These activities do not communicate information about a brand’s unique features of the benefits of using it, so they do not contribute to the building of brand identity and image. (Price-off deals, bonus packs, rebates, refunds, etc) CONSUMER-ORIENTED SALES PROMOTION OBJECTIVES OF CONSUMER-ORIENTED SALES PROMOTION o Obtaining Trial and Repurchase o Increasing Consumption of an Established Brand
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