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BMGT350 Chapter 16

BMGT350 Chapter 16 - BMGT350 Chapter 16 Sales Promotion and...

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BMGT350 Chapter 16 Sales Promotion and Personal Selling SALES PROMOTION: Advertising offers the consumer a reason to buy; Sales promotion offers an incentive to buy Sales promotion is usually cheaper than advertising and is easier to measure. With sales promotion, marketers know the exact number of coupons redeemed or the number of contest entries Consumer sales promotion: targeted to the ultimate consumer market Trade sales promotion: directed to members of the marketing channel, such as wholesalers and retailers Sales promotion has more effect on behavior than on attitudes Immediate purchase is the goal of sales promotion Objectives of promotion depend on the general behavior of target consumers o Marketers who are target loyal consumers need to reinforce existing behavior or increase product usage. An effective tool for strengthening brand loyalty is the frequent buyer program that rewards customers for repeat purchases o Cents-off coupons, free sample, or eye-catching displays will entice shoppers to try a different brand TOOLS FOR CONSUMER SALES PROMOTION Coupons: certificates that entitle consumers to an immediate price reduction when they buy the product o Encourage product trial and repurchase o Likely to increase the amount of a product bought o Promote new-product use and are likely to stimulate purchases o Popular trend due to intense competition in the consumer packaged goods category and the annual introduction of over 1200 new products o Freestanding inserts (found in newspapers) have been the traditional way of circulating printed coupons o New couponing strategies: Shortening the time in which coupons can be redeemed creates a greater sense of urgency to redeem the coupon De-emphasizing the use of coupons in favor of everyday low pricing and distributing single, all-purpose coupons that can be redeemed for several brands In-store coupons influence customers’ buying decisions Internet coupons Coupons are no longer viewed as a stand-alone tactic, but as an integral component of a larger promotional campaign Rebates: similar to coupons in the they offer a price reduction; however, because the purchaser must mail in a rebate form and usually some proof of purchase, the reward is not immediate o Allow manufacturers to offer price cuts to consumers directly o Manufacturers have more control o Because buyers must fill out forms with their names, addresses, and other data, manufacturers use rebate programs to build customer databases o Most consumers never bother to redeem them (FTC says only half of consumers eligible for rebates collect them) Premiums: an extra item offered to the consumer, usually in exchange for some proof that the promoted product has been purchased o Reinforce decisions, increase consumption, persuade nonusers to switch brands o Ex: McDonald’s Happy Meal comes with a toy; two-for-the-price-of-one bonus packs Loyalty Marketing Programs/ Frequent Buyer Programs:
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